IRS Authority to Collect Tax Penalties Gets Second Circuit Look

Judges of the Second Circuit expressed skepticism of both sides of an argument in a case examining whether the tax code gives the IRS implicit authority to assess certain penalties, or if it must go to court.

IRC Section 6038(b) imposes penalties for failure to report interest in certain foreign corporations or partnerships. The US Tax Court said the IRS lacked the authority to assess $50,000 in penalties on Joseph Safdieh for failure to report interests in foreign corporations from 2005 to 2009, so that and a tax lien it placed on his assets should be invalidated. The IRS appealed ...