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Tax Procedure Roundup 9/20/13

Posted on Sep. 20, 2013

As we get our blogging feet under us, we may try to post weekly or bi-weekly brief summaries of various tax procedure updates that we are not writing in depth on, but that we think are interesting and worthwhile.  This is the first of such installments, and I have stolen Professor Paul Caron’s “roundup” title from his Tax Prof Blog for this week.  Let me know if you have other suggestions of what this should be called.  Bad tax procedure puns would be best.

Here are some of the tax procedure items we were reading this week:

  • Jack Townsend, on his tax procedure blog, does a nice job of summarizing the TIGTA report regarding outside influence over Chief Counsel in Letter Rulings, which can be found here.
  • Tamara Ashford has been nominated as US Tax Court Judge.  Professor Paul Caron has a write up here.
  • Summary of the Ty Warner tax evasion case, including a link to Jack Townsend’s blog post on it, can be found here.  I’m still trying to financially bounce back from using all my law school loans to invest in Beanie Babies.
  • Tax Court in a memorandum decision written by Judge Marvel held that Appeals abused its discretion, remanded the case for further review in Dickes v. Comm’r.  Pertinent holding was:

The administrative record shows that, on October 24, 2011, petitioner asked Settlement Officer Breazeale to first process his penalty abatement request before he submitted his OIC. Petitioner further asked Settlement Officer Breazeale to let him know whether this was unacceptable. Settlement Officer Breazeale noted this request in the case activity record. The administrative record, however, does not show that Settlement Officer Breazeale ever responded to petitioner’s request.

By failing to respond to petitioner’s request Settlement Officer Breazeale effectively caused petitioner to be under the mistaken impression that he would have an opportunity to submit his OIC—and to become current on his tax reporting obligations—if his penalty abatement request was denied.  We conclude that Settlement Officer Breazeale erred in failing to respond to petitioner’s request and that therefore Settlement Officer Breazeale effectively denied petitioner an opportunity to submit an OIC during the section 6320/6330 hearing. Under these circumstances, remand is appropriate.

This is related to Les’ last post on remand and CDP, where he mentions the Dickes case, which can be found here.  Mr. Dickes also tried to show he used ordinary business care while failing to file his returns in order to get out of some of the penalties.  His argument failed, but he did have some valid reasons.  He was incarcerated while missing one of the deadlines, and during that time, his business records were all stolen from his lawyer’s car.  This made it difficult for him to recreate the information needed.  He also, however, indicated that he just forgot that he needed to file.

  • Informative and simple, if that is possible in this case, write up of the BMC Software can be found at the Tax Girl’s web site here.  Ms. Erb, as always, makes Southeastern Pennsylvania tax practitioners look good (even if she is a Temple, and not Villanova, alum).
  • Judge Ruwe provided an extensive review of the “underpayment” formula under Reg. § 1.6664-2(a) for the accuracy related and fraud penalties in Snow v. Comm’r, 141 TC No. 6.  This is a Checkpoint link, sorry for those of you who don’t have a subscription.  The case is fairly new, and I could not find it on any free on-line pages yet.  Worth tracking down. ****update–Snow case is now posted on Tax Court page and can be found here****
  • Joe Kristan has a blurb on Mo’ Money Taxes being barred from preparing returns due to fraud.  To quote the Notorious B.I.G., “Mo’ Money, Mo’ [tax] Problems.”
  • Two partner/non-partner jurisdictional questions reviewed by the 5th and 8th Circuit in Irvine and Thompson.  These may loosely tie into the jurisdictional question SCOTUS may review in October, which we blogged about here.  We may touch on one or both of these cases in greater detail after a closer review.
  • Forbes has a great post on IRS Compliance trends, showing a large decrease in revenue, which happened to occur after and during funding cuts.  Post is here.  I don’t think there is much of a causation/correlation debate here.
  • Article about TITGA report on tax return preparer penalty application done by Tax Pro Today can be found here.  The report indicated the Service is doing a poor job of imposing the penalty, and there is a chance that the IRS is going to follow TITGA suggestions about better implantation and then clamp down on preparers.
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