Treasury Proposes Rules for Supervisory Approval of IRS Penalties (2)

Treasury and the IRS released proposed rules on the supervisory approval of penalties assessed by the IRS on Monday.

The new rules clarify that the IRS can get the supervisory approval anytime before a pre-assessment notice is sent to the taxpayer. This creates a bright line rule that will make it easier for the IRS to comply and give taxpayers more certainty when deciding to challenge a penalty, tax professionals said.

“The difficulty in applying or anticipating how courts will construe these rules has resulted in otherwise appropriate penalties on taxpayers not being sustained and has undermined the efficacy ...