In Uncategorized on 05/13/2020 at 15:24

I never knew IRS was a fan of Woody Guthrie’s. But I do know that STJ Lewis (“Wotta Name!”) Carluzzo, like the late great Woody, “don’t like dictators not much” his own self.

So when IRS claims that the Section 6721(e) check-raise takes the Section 6721(a) $250 a throw for nonfiling of info returns chop to $500 a throw for willfulness by electricity sans Boss Hoss, STJ Lew isn’t having it.

Here’s Soccer Garage, Inc., 6946-19SL, filed 5/13/20. The Soccers failed to file the info returns when IRS asked, so they hit the Soccers with the chops and a motion for summary J. IRS claims Section 6751(b) un-Boss Hosses Section 6721 because computed electronically.

“Respondent’s motion proceeds as though petitioner not only failed to satisfy a filing obligation, but intentionally disregarded that obligation. According to respondent’s motion, supervisory approval did not precede the assessment of the penalties. According to respondent, ‘the section 6721 penalty is one automatically calculated through electronic means and may be assessed without written supervisory approval’. See sec. 6751(b)(2).

“Section 6721(a) imposes a penalty of $250 for each failure to file an information return with respondent on or before the required filing date. Sec. 6721(a)(2)(A). If the employer intentionally disregards the filing requirement set forth in section 6721(a)(2), then section 6721(e) increases the penalty with respect to each failure that would otherwise be calculated under section 6721(a) to $500, or, if greater, 10% of the aggregate amount of the items required to be reported correctly. Sec. 6721(e). As relevant, a failure to file correct information returns under code section 6721(e) is due to ‘intentional disregard if it is a knowing or willful * * * failure to file timely’. Sec. 301.6721-1(f)(2), Proced. & Admin. Regs. Whether a person knowingly or willfully fails to file timely ‘is determined on the basis of all the facts and circumstances in the particular case.’ Id. In this case, we are called upon to resolve the parties’ dispute over the assessment of section 6721(e) penalties.” Order, at p. 2.

IRS’ electronic mind-reader, huh? Not for summary J.

Not while STJ Lew is on the watch.

“It would seem that somewhere in the process of the assessment of a section 6721(e) penalty a human being is required to consider ‘all of the facts and circumstances’ alluded to in the regulation in order to determine whether a taxpayer’s ’disregard’ was ’intentional’. According to respondent, that didn’t happen in this case. If, as respondent’s motion suggests, human input is not required because intentional disregard can be established by inference, then respondent is not entitled to a finding that petitioner intentionally disregarded its filing obligations at this stage of the proceedings.” Order, at pp. 2-3.

Of course, as an assessable, Section 6721 liability can be contested at a CDP, because no prior opportunity to contest, per Section 6330(c)(2)(B).

And intention and willfulness are obviously fact-driven issues, so no summary J.

No, IRS, the whole country hadn’t ought to be run by electricity.



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