IRS Followed Right Process for Technology Company’s Tax Penalty

The IRS properly obtained supervisory approvals for $46 million in penalties against Computer Sciences Corp. over a capital loss deduction from a corporate restructuring, the US Tax Court said Monday, rejecting the company’s arguments that the government needed to provide more documentation to justify its penalties.

The IRS followed the proper procedures for managerial approval under IRC Section 6751(b) when it disallowed a $651 million capital loss deduction sought by Computer Sciences in 2013, found a deficiency of over $276,500, and assessed an accuracy-related penalty of almost $45.6 million. Judge Albert G. Lauber said the IRS officials engaged in “reasoned ...