IRS Didn’t Get Timely Approval for $1.9 Million in Penalties

A Florida man failed to prove that nearly $25 million in transfers to him were gifts that he didn’t need to report as taxable income, but the IRS can’t collect any of the nearly $1.9 million it assessed in penalties because it didn’t approve the penalties in time, the U.S. Tax Court ruled.

Burt Kroner argued that the transfers were gifts under tax code Section 102, which depended on the intention of David Haring, the transferor. Kroner said he developed a close personal relationship with Haring as a result of a long business relationship. Kroner ...