In Uncategorized on 01/08/2020 at 14:31

Yes, I know that the Year of the Rat begins January 25; I also know that the next Year of the Horse will not begin until February 17, 2026, to celebrate the end of the TCJA tax reshuffles.

But Tax Court is determined to rush the seasons, as we’ve seen with a couple recent full-dress T. C.s (hi, Judge Holmes) highlighting the Section 6751(b) Boss Hoss prerequisites. So maybe this is the Year of the Boss Hoss, 6751.

Howbeit, there’s a slew of Orders today, setting forth the checklist for IRS’ assertion of non-electronic chops.

One such is Alan Schwartz, Docket No. 1696-19S, filed 1/8/20. And even though this is a small claimer, Al is petitioning the chops in the SNOD. So IRS must play by the rules.

“Respondent cannot assess an accuracy-related penalty under section 6662(a) unless he has complied with the requirement of section 6751(b)(1), which provides:

“No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination….” Order, at p. 1.

Alright, already, STJ Diana L Leyden, we got the point. But maybe IRS didn’t, so STJ Di gives them a checklist.

“To show compliance with this provision, respondent must show (1) the identity of the individual who made the ‘initial determination’, (2) an approval of the penalty ‘in writing’, (3) the identity of the person giving approval and his or her status as the ‘immediate supervisor’ and (4) evidence that the supervisory approval was obtained no later than the issuance to petitioner(s) of the initial formal communication of proposed adjustments that includes penalties and provides the taxpayer the right to protest those proposed adjustments, such as a 30-day letter or Letter 525. See sec. 6751(b)(1); Clay v. Commissioner, 152 T.C. 223, 249 (2019).” Order, at p. 1.

For the Clay story, see my blogpost “Indians Not Taxed – Not!” 4/24/19.

So, IRS, here’s what you do.

“If respondent wishes to continue to assert the accuracy-related penalty under section 6662(a) in this deficiency case, he shall file a status report and attach thereto any relevant documents to demonstrate compliance with section 6751(b)(1). Alternatively, if respondent conclude that he did not comply with the requirement under section 6751(b)(1) with respect to the accuracy-related penalty under section 6662(a), he should consider conceding that penalty and notify the Court by filing a status report.” Order, at p. 2.

And IRS gets until January 29 to figure out how to proceed.

So get out those fireworks and put on your dragon suit. This is the Year of the Boss Hoss.



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