The IRS and Fraud Penalties: Recent Case Addresses the Approval Requirement

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The IRS and Fraud Penalties: Recent Case Addresses the Approval Requirement

Minemyer v. Comm’r, T.C. Memo. 2020-99 | July 1, 2020 | Kerrigan, K. | Dkt. No. 22182-10

Short SummaryPetitioner contested the IRS’ imposition of the fraud penalty under IRC §6663(a) for his 2001 personal income taxes.  The Tax Court held that the IRS had not met its burden of production for the determination of the IRC §6663(a) fraud penalty, and therefore the Petitioner was not liable for the fraud penalty for 2001.

Key Issue:  Whether the IRS had met its burden of production for the determination of the IRC §663(a) fraud penalty.

Primary Holdings

Key Points of Law:

InsightThe Hewitt case illustrates the need of a taxpayer or his or her representative to investigate and determine if the IRS has followed its procedural requirements under IRC §6751(b)(1) when it imposes the fraud penalty.  There is the possibility that the IRS has not, and the penalty can be removed.

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