Case: Initial Written Permission Challenges to Penalties Made at the Partnership Level (E.D. Tex.) (IRC §6751)

Partners must bring penalty challenges under the initial written supervisory approval provision of tax code Section 6751 in a TEFRA partnership-level proceeding rather than a partner-level refund suit, a district court held in granting the government’s motion to dismiss the partners’ Section 6751 claims. The partners argued that the government did not meet its burden of production and proof regarding the penalties because there was no evidence of prior written supervisory approval when the penalties were assessed against the individual partners. The court refused to extend the government’s burden in a partner-level proceeding. Under TEFRA’s two-tiered structure, the ...