IRS Supervisory Approval Required For Penalties

A Tax Court decision was affirmed dealing with  IRS Supervisory Approval for Penalties. J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for clients.

The Tax Court held in an IRS Supervisory Penalty Approval case that the IRS’s issuance to a taxpayer of a Letter 1807 and summary report setting forth the Examination Division’s tentative proposed adjustments and inviting the taxpayer to a conference to discuss them did not constitute the initial determination of a Penalty Assessment requiring supervisory approval under Code Sec. 6751(b)(1). The Tax Court held that the 60-day letter issued to the taxpayer was the initial determination requiring supervisory approval because it formally communicated the Examination Division’s definite determination to assert the penalties. Belair Woods, LLC v. Comm’r, 154 T.C. No. 1 (2020).