May 14, 2010 - Phil Hodgen

Settling amnesty cases where extremely small tax liabilities exist

From someone who put the question directly to the IRS Grand Poohbahs at last week’s ABA Tax Section meeting in Washington DC:

In response to my direct question at one of the panels, I think it was from Ron Schultz, I was told that “currently” revenue agents did not have discretion to settle a de minimus case for less than the 20% penalty.

Translation.  Let’s say you have an account with $100,000 in it.  Earning the current 0.000001% interest that bank accounts do.  You end up owing $1.00 of tax.  This means your friendly Revenue Agent will settle your amnesty case for $1.00 of tax and $20,000 of penalties.

Tags:  #mofo

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