Bloomberg Tax
Free Newsletter Sign Up
Bloomberg Tax
Welcome
Go
Free Newsletter Sign Up

IRS Settlement Offers Didn’t Trigger Penalty Approval Requirement

Aug. 31, 2020, 8:58 PM

IRS offers to settle a couple’s potential tax liability—at reduced penalty rates—didn’t require a supervisor’s approval because the offers came before the agency completed its audit, the U.S. Tax Court ruled.

Douglas M. Thompson and Lisa Mae Thompson argued that penalties imposed following those initial offers violated tax code Section 6751(b), which requires the agency to obtain an immediate supervisor’s approval of an initial penalty determination. The Monday decision provides further clarification of a provision that has sparked ongoing litigation at the Tax Court.

The IRS obtained supervisory approval when it ultimately imposed the penalties, calculated at ...