TreatiseTreatise

Internal Revenue Service: Practice and Procedure Deskbook
(4th Edition)

 by Erin M. Collins, Edward M. Robbins, Jr.
 
 Copyright: 2010-2016
 Last Updated: September 2016

 Product Details >> 

Product Details

  • ISBN Number: 9781402413384
  • Page Count: 2296
  • Number of Volumes: 2
  •  

“Navigating the complex maze of IRS practice and procedure rules can be daunting — but the task is made much easier with help from two of the most experienced tax controversy attorneys in the business today.”
– Kendall Jones, Sutherland

Internal Revenue Service: Practice and Procedure Deskbook provides the thorough legal, procedural, and strategic information attorneys, accountants and other tax professionals need to represent clients more effectively when dealing with the IRS, including guidance on:

  • Examinations — including how to deal with IRS document requests, narrow the scope of IRS audits, and reach settlements as part of a correspondence, office or field examination
  • Large Business & International Division Examinations — from how to prepare for LB&I examinations to how to use IRS programs to expedite resolutions
  • Assessments — with clear coverage of IRS assessment procedures and the Code’s complex mitigation provisions
  • Civil Penalties — including steps you can take to abate penalties and minimize the risk of particular penalties being asserted, as well as, a chart containing a detailed summary of the numerous civil penalties listed by Code section
  • Tax Fraud — with details on how to make voluntary disclosures to avoid investigations, assemble defense teams, and deploy “good faith” and other defenses
  • Appeals — including how to proceed effectively in appeals conferences, as opposed to examinations, and pick the right settlement options for each client
  • Litigation — with guidance on how to select the most favorable judicial forum for each case and cope with the Tax Court’s unique rules of practice and procedure
  • Collections — from Collection Due Process hearings to surefire solutions to clients’ collection problems
Internal Revenue Service Practice and Procedure Deskbook offers analysis of key Tax Court decisions and other case law, and highlighted “Practice Pointers” and other tips for successfully representing clients in IRS dealings.
  Table of Contents
Chapter 1: Introduction; and Appendix 1A
  • § 1:1 : Types of Authority in Federal Tax Practice1-2
  • § 1:2 : Statutory/Legislative Authority1-3
    • § 1:2.1 : The Code and Legislative History1-3
    • § 1:2.2 : Legislative History and the Blue Book1-3
    • § 1:2.3 : Tax Treaties1-4
  • § 1:3 : Administrative Authority1-6
    • § 1:3.1 : Regulations1-6
      • [A] : Final Regulations1-7
        • [A][1] : Prospective and Retroactive Regulations1-10
      • [B] : Proposed Regulations1-12
      • [C] : Temporary Regulations1-12
      • [D] : Procedural Regulations1-13
      • [E] : Finding Regulations1-14
    • § 1:3.2 : IRS Rulings1-15
      • [A] : Letter Rulings1-16
        • [A][1] : Closing Agreement1-18
        • [A][2] : Determination Letter1-18
        • [A][3] : Information Letter1-18
        • [A][4] : Circumstances Under Which Letter Rulings Are Issued1-19
        • [A][5] : Circumstances Under Which Letter Rulings Are Not Issued1-20
        • [A][6] : Circumstances Under Which Determination Letters Are Not Issued1-21
        • [A][7] : Considerations Involved in Ruling Requests1-21
        • [A][8] : Letter Ruling Conferences1-22
        • [A][9] : Disclosure Pursuant to Section 61101-23
        • [A][10] : 9100 Relief1-24
          • [A][10][a] : Filing Requirements1-28
          • [A][10][b] : Conference of Right1-30
          • [A][10][c] : Judicial Review1-30
      • [B] : Revenue Rulings1-31
      • [C] : Revenue Procedures1-33
      • [D] : Technical Advice Memoranda (TAMs)1-34
      • [E] : Action on Decisions—IRS Acquiescence Program for Court Decisions1-37
      • [F] : Chief Counsel Advice (CCA)1-38
      • [G] : General Counsel Memoranda (GCMs)1-40
      • [H] : Other Pronouncements1-40
    • § 1:3.3 : Judicial Authority1-41
      • [A] : Tax Court1-41
      • [B] : Decisions of Other Federal Courts1-43
      • [C] : Court of Appeals1-44
      • [D] : U.S. Supreme Court1-45
      • [E] : Judicial Authority1-45
    • § 1:3.4 : Other Secondary Authority1-46
    • § 1:3.5 : Internal Revenue Manual1-46
    • § 1:3.6 : Computerized Research1-47
    • § 1:3.7 : Free Databases and Websites1-47
  • Appendix 1A : Free WebsitesApp. 1A-1
Chapter 2: Circular 230 and the Ethics of Tax Practice
  • § 2:1 : Ethics of Tax Practice and Circular 2302-3
  • § 2:2 : Who May Practice Before the IRS?2-4
  • § 2:3 : Rules Governing Tax Return Preparers2-10
    • § 2:3.1 : In General2-10
    • § 2:3.2 : Treasury Regulations Section 1.6109-2(h) Exceptions2-10
    • § 2:3.3 : Competency Examinations for Registered Tax Return Preparers2-12
    • § 2:3.4 : Forms Requiring a PTIN2-13
  • § 2:4 : Circular 230: Duties and Restrictions2-14
    • § 2:4.1 : Duty to Cooperate2-15
    • § 2:4.2 : Knowledge of Client Error or Omission2-16
    • § 2:4.3 : Duty to Disclose Adverse Authority2-18
  • § 2:5 : Office of Professional Responsibility2-21
    • § 2:5.1 : OPR Investigations2-25
    • § 2:5.2 : Alternative Disciplinary Approaches2-26
    • § 2:5.3 : Processing Investigations2-28
    • § 2:5.4 : Sanctions and Other Disciplinary Measures2-31
    • § 2:5.5 : Statute of Limitations for Circular 230 Disciplinary Actions2-33
  • § 2:6 : Best Practices for Tax Advisors2-35
  • § 2:7 : Competency2-36
  • § 2:8 : Standards for Tax Returns and Documents, Affidavits, and Other Papers2-36
  • § 2:9 : Written Advice2-38
  • § 2:10 : Historical Perspective: Original (1994 Edition) Standards for Tax-Shelter Opinion Letters2-40
    • § 2:10.1 : Definition of Terms2-41
    • § 2:10.2 : Tax-Shelter Opinion Requirements2-44
      • [A] : Factual Matters2-44
      • [B] : Relating Law to Facts2-46
      • [C] : Identifying Material Issues2-46
      • [D] : Opinions on Each Material Issue2-46
      • [E] : Overall Evaluation2-47
      • [F] : Description of Opinions2-49
      • [G] : Partial Opinions and Reliance on Other Opinions2-49
  • § 2:11 : Historical Perspective: Revised Standards for Tax-Shelter Opinion Letters and Related Matters (May 2005 until June 2014)2-50
    • § 2:11.1 : Requirements for Covered Opinions2-52
      • [A] : Covered Opinion Defined2-54
      • [B] : Excluded Advice Defined2-54
      • [C] : Federal Tax Issue Defined2-58
      • [D] : Reliance Opinion Defined2-58
      • [E] : Marketed Opinion Defined2-58
      • [F] : Conditions of Confidentiality Defined2-59
      • [G] : Contractual Protection Defined2-59
      • [H] : Prominent Disclosure Defined2-60
      • [I] : State or Local Bond Opinion Defined2-60
      • [J] : Principal Purpose2-61
      • [K] : Requirements for Covered Opinions2-62
      • [L] : Competence to Provide Opinion and Reliance on Opinion of Others2-66
      • [M] : Required Disclosures2-66
      • [N] : Effect of Opinion That Meets Former Section 10.35 Standards2-68
      • [O] : Effective Date2-68
    • § 2:11.2 : Procedures to Ensure Compliance with Covered Opinions2-68
      • [A] : Failure to Comply with the Requirements for Covered Opinions2-68
      • [B] : Effective Date2-69
  • § 2:12 : Establishment of Advisory Committees2-69
    • § 2:12.1 : Advisory Committees2-69
    • § 2:12.2 : Effective Date2-70
  • § 2:13 : Disreputable Conduct2-70
  • § 2:14 : Violation of Regulations2-71
  • § 2:15 : Tax-Shelter Opinion Letters and Attorney-Client Privilege2-72
    • § 2:15.1 : Introduction2-72
    • § 2:15.2 : Statutory Change2-74
Chapter 3: Organization of the IRS
  • § 3:1 : Function and Authority of the Internal Revenue Service3-3
  • § 3:2 : Former IRS Organization3-4
  • § 3:3 : Overview of the 1998 Reorganization3-5
  • § 3:4 : IRS Oversight Board3-7
  • § Chart 3-1 : IRS Organization Chart: May 20163-8
  • § 3:5 : Department of Treasury and the Commissioner of Internal Revenue3-9
  • § 3:6 : IRS National Office3-10
  • § 3:7 : Chief Counsel3-10
  • § 3:8 : Appeals3-11
  • § 3:9 : Taxpayer Advocate Service (TAS)3-12
    • § 3:9.1 : TAS Overview3-12
    • § 3:9.2 : Using the Taxpayer Advocate Program and Taxpayer Assistance Orders (TAOs)3-16
    • § 3:9.3 : TAS Organizational Structure3-17
      • [A] : TAS Casework Function3-17
      • [B] : TAS Systemic Analysis and Advocacy3-18
  • § 3:10 : Examination: Four Operating Divisions3-19
    • § 3:10.1 : Wage and Investment (W&I) Operating Division3-19
      • [A] : Taxpayer Characteristics3-19
      • [B] : Organizational Structure3-19
        • [B][1] : Communications, Assistance, Research and Education (CARE)3-20
          • [B][1][a] : Media and Publications3-20
          • [B][1][b] : Stakeholder, Partnership, Education, and Communication3-20
          • [B][1][c] : Field Assistance Operations Overview3-21
        • [B][2] : Customer Account Services (CAS)3-21
          • [B][2][a] : Submission Processing3-21
          • [B][2][b] : Accounts Management (AM)3-22
          • [B][2][c] : Joint Operations Center (JOC)3-22
        • [B][3] : Compliance3-22
    • § 3:10.2 : Small Business/Self-Employed Operating Division3-22
      • [A] : Taxpayer Characteristics3-23
        • [A][1] : Overview3-23
        • [A][2] : Small Businesses3-24
        • [A][3] : Self-Employed and Supplemental Income Earners3-24
        • [A][4] : Other SB/SE Taxpayers3-24
      • [B] : Organizational Structure3-25
        • [B][1] : Communications and Stakeholder Outreach (CSO)3-25
          • [B][1][a] : Taxpayer Assistance Centers (TAC)3-27
        • [B][2] : CAS Organization3-27
          • [B][2][a] : Submission Processing3-28
          • [B][2][b] : Accounts Management (AM)3-28
        • [B][3] : Compliance Organization3-28
      • [C] : Stakeholder Relationship Management (SRM)3-30
        • [C][1] : Issue Management Resolution Systems3-30
    • § 3:10.3 : Large Business & International (LB&I)3-30
      • [A] : Taxpayer Characteristics3-30
      • [B] : Organizational Structure3-31
        • [B][1] : The “Future State”3-31
        • [B][2] : Nine Practice Areas3-32
    • § 3:10.4 : Tax Exempt and Government Entities (TE/GE) Operating Division3-32
      • [A] : Taxpayer Characteristics3-33
      • [B] : TE/GE Organizational Structure3-33
      • [C] : Employee Plans (EP) Organization3-34
      • [D] : Exempt Organizations (EO)3-34
      • [E] : Government Entities (GE) Organization3-34
        • [E][1] : Tax Exempt Bonds3-35
        • [E][2] : Federal, State, and Local Governments (FSLG)3-35
        • [E][3] : Indian Tribal Governments3-35
      • [F] : Process-Based Organizational Segments3-36
        • [F][1] : TE/GE Customer Education and Outreach (CE&O)3-36
        • [F][2] : TE/GE Rulings and Agreements3-36
        • [F][3] : TE/GE Examinations3-37
        • [F][4] : TE/GE CAS3-37
  • § 3:11 : Office of Chief Counsel3-37
    • § 3:11.1 : Organizational Structure3-38
      • [A] : Associate Chief Counsel Offices3-38
      • [B] : Division Counsel and Field Counsel3-38
  • § 3:12 : Appeals3-39
    • § 3:12.1 : Organizational Structure3-39
      • [A] : Appeals Operating Division Structure3-39
  • § 3:13 : Joint Committee on Taxation (JCT)3-40
  • § 3:14 : Office of Professional Responsibility (OPR)3-42
  • § 3:15 : CI3-42
  • § 3:16 : Place for Filing Notices3-43
  • § 3:17 : IRS Fax Guidelines3-44
    • § 3:17.1 : General Guidelines3-44
    • § 3:17.2 : Specific Guidance on Use of Faxes in Tax Administration Processes3-45
  • § 3:18 : Freedom of Information Act (FOIA) Public Liaisons3-46
  • § 3:19 : IRS VITA Grant Program3-47
  • § 3:20 : IRS Whistleblower Office3-47
  • § 3:21 : E-Services for Tax Professionals3-48
Chapter 4: Tax Returns and Interest
  • § 4:1 : Background4-3
  • § 4:2 : Income Tax Returns—Who Must File4-5
    • § 4:2.1 : Individual Income Tax Returns4-5
      • [A] : Individual’s Filing Status4-6
      • [B] : Joint Return4-6
      • [C] : Joint and Several Liability4-7
      • [D] : Qualifying Widow(er) with Dependent Child4-7
      • [E] : Head of Household4-7
      • [F] : Individual Is Under Eighteen Years of Age4-8
      • [G] : Alien4-9
    • § 4:2.2 : Corporations4-10
    • § 4:2.3 : Partnerships4-12
    • § 4:2.4 : Limited Liability Partnership4-13
    • § 4:2.5 : Limited Liability Company4-14
    • § 4:2.6 : Trusts and Estates4-14
    • § 4:2.7 : Exempt Organizations/Political Organizations/Homeowners’ Associations4-15
    • § 4:2.8 : Information Returns and Payee Statements4-15
      • [A] : Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR)4-16
      • [B] : Foreign Account Tax Compliance Act (FATCA)4-17
        • [B][1] : Disclosures with Respect to Foreign Assets4-18
        • [B][2] : The End of Foreign Bank Secrecy for U.S. Account Holders4-20
    • § 4:2.9 : IRS Substituted Returns4-22
    • § 4:2.10 : Amended Returns4-23
    • § 4:2.11 : Net Operating Loss Five-Year Provision4-26
  • § 4:3 : When to File Tax Returns4-28
    • § 4:3.1 : Individual Tax Return4-28
    • § 4:3.2 : Corporation4-28
    • § 4:3.3 : Partnership4-28
    • § 4:3.4 : Trusts and Estates4-29
    • § 4:3.5 : Exempt Organizations/Political Organizations/Homeowners’ Associations4-29
    • § 4:3.6 : Filing Date Falls on Saturday, Sunday, or Legal Holiday4-29
    • § 4:3.7 : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid4-30
    • § 4:3.8 : Superseded Returns Filed Prior to Expiration of Extended Due Date4-32
    • § 4:3.9 : Superseded Return—Impact on Statute of Limitations4-33
    • § 4:3.10 : Qualified Amended Return4-34
    • § 4:3.11 : Extensions of Time to File Tax Return4-35
      • [A] : Individuals4-35
        • [A][1] : Additional Extension4-37
      • [B] : Corporations4-37
      • [C] : Partnerships4-39
      • [D] : Estates and Trusts4-39
      • [E] : Information Returns4-39
  • § 4:4 : How to File Tax Returns4-39
    • § 4:4.1 : Electronic Filing4-39
    • § 4:4.2 : Certified or Registered Mail4-42
    • § 4:4.3 : Use of Private Meter Machines4-43
    • § 4:4.4 : Designated Private Delivery Service4-43
    • § 4:4.5 : Hand Delivery4-45
    • § 4:4.6 : What Constitutes a Valid Tax Return4-46
  • § 4:5 : Who Must Sign the Return4-49
  • § 4:6 : Common Errors When Preparing Individual Tax Returns4-51
  • § 4:7 : Interest on Underpayments and Overpayments of Tax4-52
    • § 4:7.1 : Background4-52
    • § 4:7.2 : Basic Interest Calculation4-55
      • [A] : Step One: Amount of Tax Underpayment or Overpayment4-55
      • [B] : Step Two: Date Interest Begins Accruing on Underpayment or Overpayment4-56
      • [C] : Step Three: Date Interest Stops Accruing on Underpayment or Overpayment4-58
      • [D] : Step Four: Applicable Interest Rates4-60
    • § 4:7.3 : Restrictions and Adjustments to the General Rules4-62
      • [A] : Large Corporate Underpayments—“Hot Interest”4-62
      • [B] : Large Corporate Overpayments—GATT Interest4-63
      • [C] : Net Operating Loss Carrybacks4-63
      • [D] : Foreign Tax Credit Carrybacks4-64
      • [E] : Refunds Within Forty-five Days After Return Is Filed4-65
      • [F] : Interest Netting and Overpayment Interest Resulting from Transfer of Credits4-66
        • [F][1] : Background4-66
        • [F][2] : Current Law4-67
        • [F][3] : When Does Global Interest Netting Apply?4-68
        • [F][4] : How to Request Interest Netting4-68
        • [F][5] : Statute of Limitations for Filing Form 8434-69
        • [F][6] : Case Law4-71
      • [G] : Applicability to Assessable Penalties, Additional Amount, and Additions to Tax4-74
      • [H] : Overpayment of Estimated Quarterly Tax Payments4-74
      • [I] : Statutory Deposit Procedures—Cash Bond Versus Payment of Tax4-75
      • [J] : Notice and Demand Grace Period4-76
      • [K] : Waiver of the Restrictions on Assessment and Collection4-76
      • [L] : Abatement of Interest Attributable to Unreasonable Service Error4-77
      • [M] : Suspension of Interest When the IRS Fails to Contact an Individual Taxpayer4-78
      • [N] : Combat Zone4-79
      • [O] : Presidentially Declared Disaster4-80
      • [P] : Impact of a Termination and Jeopardy Assessments4-80
      • [Q] : Seized Property4-80
      • [R] : Interest on Estate Tax Returns4-80
      • [S] : Restricted Interest4-81
    • § 4:7.4 : Administrative Procedures—Claims for Refunds4-82
    • § 4:7.5 : Litigating Interest Issues4-83
      • [A] : Tax Court4-83
      • [B] : District Court or Court of Federal Claims4-84
        • [B][1] : Suits for Refunds of Interest on Underpayments4-84
        • [B][2] : Suits for Statutory Interest on Overpayments4-84
        • [B][3] : Interest Offsets4-85
Chapter 5: Taxpayer Access to IRS Information
  • § 5:1 : Informal Requests for Tax Information5-2
  • § 5:2 : Freedom of Information Act (FOIA)5-2
    • § 5:2.1 : Overview5-2
    • § 5:2.2 : FOIA Public Liaisons5-7
    • § 5:2.3 : Information Available5-7
      • [A] : Records Covered by FOIA5-7
      • [B] : Publications Required by FOIA5-8
      • [C] : Public Inspections Required by FOIA5-9
  • § 5:3 : Making FOIA Request5-10
    • § 5:3.1 : Contents of FOIA Request5-10
    • § 5:3.2 : Where to Send a FOIA Request5-13
    • § 5:3.3 : Timing of the IRS Response to a FOIA Request5-13
    • § 5:3.4 : FOIA Exemptions5-15
      • [A] : Section 552(b)(1) Exemption: Classified Documents Pertaining to National Defense and Foreign Policy5-16
      • [B] : Section 552(b)(2) Exemption: Internal Personnel Rules and Practices5-16
      • [C] : Section 552(b)(3) Exemption: Information Exempt Under Other Laws5-19
      • [D] : Section 552(b)(4) Exemption: Trade Secrets and Confidential Commercial or Financial Information5-20
      • [E] : Section 552(b)(5) Exemption: Inter-Agency or Intra-Agency Memorandums or Letters5-21
      • [F] : Section 552(b)(6) Exemption: Personal Privacy5-25
      • [G] : Section 552(b)(7) Exemption: Law Enforcement5-27
      • [H] : Section 552(b)(8) Exemption: Financial Institutions5-31
      • [I] : Section 552(b)(9) Exemption: Geological Information5-31
    • § 5:3.5 : FOIA Exclusions5-32
      • [A] : Exclusion 15-32
      • [B] : Exclusion 25-32
      • [C] : Exclusion 35-32
    • § 5:3.6 : Administrative Appeal Procedures5-32
    • § 5:3.7 : Judicial Action5-34
    • § 5:3.8 : FOIA Practice Tip5-35
Chapter 6: The Examination Function
  • § 6:1 : What Is an IRS Audit?6-3
  • § 6:2 : How Returns Are Selected for Examination6-3
  • § 6:3 : Types of IRS Audits6-8
    • § 6:3.1 : Discriminant Inventory Function (DIF) System Audits and Unreported Income Discriminant Index Formula (UIDIF) Audits6-10
    • § 6:3.2 : Campus Reporting Compliance Programs6-11
      • [A] : Correspondence and Submission Processing Center Examinations6-11
      • [B] : Automated Underreporter (AUR) Program (Formerly Information Reporting Program (IRP) Audits)6-13
        • [B][1] : In General6-13
        • [B][2] : Soft Notice Program6-15
      • [C] : Mathematical Errors6-16
    • § 6:3.3 : Taxpayer Compliance Measurement Program (TCMP) Audits and the National Research Program (NRP)6-18
    • § 6:3.4 : Project Audits6-21
    • § 6:3.5 : Large Case Examinations6-23
    • § 6:3.6 : Partnership Audits Under the Tax Equity and Fiscal Responsibility Act of 1982 and the Taxpayer Relief Act of 19976-24
    • § 6:3.7 : Executive Branch Audit Influence Barred6-25
  • § 6:4 : Office and Field Audits6-26
    • § 6:4.1 : Office Examinations6-26
    • § 6:4.2 : Field Examinations6-28
  • § 6:5 : Chronology of an IRS Audit6-28
    • § 6:5.1 : Practical Aspects of an IRS Audit6-34
      • [A] : IRS’s Authority to Examine Books and Records6-34
      • [B] : IRS Methods of Obtaining Information6-35
        • [B][1] : Information Document Request (IDR)6-35
        • [B][2] : Third-Party Contacts6-37
        • [B][3] : Formal Document Request (FDR)6-37
        • [B][4] : Tour of Taxpayer Business6-37
        • [B][5] : Accountants’ Work Papers6-38
  • § 6:6 : How to Handle an IRS Audit6-39
    • § 6:6.1 : Introduction6-39
    • § 6:6.2 : Interview and Techniques6-44
    • § 6:6.3 : Notice of Proposed Adjustment6-45
    • § 6:6.4 : Agent’s Settlement Authority6-46
    • § 6:6.5 : Do’s and Don’ts6-47
    • § 6:6.6 : Audit Conclusions6-49
      • [A] : No Change6-49
      • [B] : Agreed Case6-49
      • [C] : Unagreed Case6-49
      • [D] : Partially Agreed Case6-51
  • § 6:7 : Fast Track Dispute Resolution Program: Fast Track Mediation or Fast Track Settlement6-51
  • § 6:8 : Thirty-Day Letter6-55
  • § 6:9 : Extending the Statute of Limitations (and Taxpayer Bill of Rights 3)6-59
  • § 6:10 : Statutory Notice of Deficiency6-66
  • § 6:11 : Early Termination of Audits: Repetitive Audit Procedures6-67
  • § 6:12 : Reopening of Case by Taxpayer Other Than by Filing Formal Claim: Audit Reconsiderations6-68
  • § 6:13 : Abatement of Interest for IRS Errors and Delays, and Penalties for Erroneous IRS Advice6-71
  • § 6:14 : Reopening of Closed Audit by IRS6-72
  • § 6:15 : Rescission of the Ninety-Day Letter6-73
  • § 6:16 : Abatement of Interest: Taxpayer Bill of Rights 26-75
  • § 6:17 : Attorney-Client Privilege Extended to “Federally Authorized Tax Practitioners”6-78
    • § 6:17.1 : Background6-78
    • § 6:17.2 : Law6-80
    • § 6:17.3 : Questions and Concerns6-85
    • § 6:17.4 : Attorney-Client Privilege and Section 75256-88
      • [A] : All Communications Between an Attorney or Practitioner and the Client Are Not Privileged Communications6-88
      • [B] : The Privilege Does Not Apply to Communications with Third Parties6-89
      • [C] : The Privilege Does Not Apply to the Preparation of Tax Returns6-90
      • [D] : A Confidential Document Does Not Remain Privileged Regardless of Distribution6-91
        • [D][1] : Voluntary Disclosure6-91
        • [D][2] : Inadvertent Disclosure6-94
      • [E] : Giving Preexisting Documents to an Attorney or Practitioner Does Not Qualify Them for the Privilege6-95
      • [F] : The Tax Practitioner Privilege Is Not Unlimited6-95
Chapter 7: Large Case Examinations
  • § 7:1 : What Is a Large Case Audit?7-4
  • § 7:2 : LB&I Reorganization, Again: “Future State”7-4
    • § 7:2.1 : IRS Rules of Engagement7-5
    • § 7:2.2 : New Organizational Structure7-6
    • § 7:2.3 : Nine Practice Areas7-7
  • Chart 7-1 : LB&I Organizational Chart7-9
    • § 7:2.4 : Goals of the Future State Reorganization7-10
    • § 7:2.5 : Campaigns7-10
    • § 7:2.6 : Issue-Based Examinations and Issue-Driven Risk Analysis7-11
    • § 7:2.7 : Pre-“Future State”: LB&I’s Previous Reorganizations7-12
  • § 7:3 : Under the Future State, Who Will Be My Team?7-12
    • § 7:3.1 : Case Manager Roles and Responsibilities7-13
    • § 7:3.2 : Issue Manager Roles and Responsibilities7-13
    • § 7:3.3 : Managers of Team Members Who Are Not Designated As the Case Manager or Issue Manager7-14
    • § 7:3.4 : Team Coordinator Roles and Responsibilities7-14
    • § 7:3.5 : Issue Team Member Roles and Responsibilities7-14
  • § 7:4 : LB&I Examination7-15
    • § 7:4.1 : Phase One: Planning a LB&I Examination7-16
      • [A] : IRS Preliminary Examination Work and Risk Analysis7-16
      • [B] : Planning File7-19
      • [C] : Examination Plan7-20
      • [D] : Opening Conference with Taxpayer7-22
    • § 7:4.2 : Phase Two: Execution Phase7-23
      • [A] : Acknowledgment on the Facts7-24
      • [B] : Resolution Phase7-25
  • § 7:5 : Taxpayer Preparation for Large Case Examinations7-25
    • § 7:5.1 : Opening Conference7-28
    • § 7:5.2 : Other Factors to Consider for an LB&I Examination7-29
      • [A] : Regular Communications with the Team Manager (aka Case Manager)7-29
      • [B] : Communications with Other IRS Audit Personnel7-30
      • [C] : Communications with and Access to Taxpayer’s Employees7-30
      • [D] : Location/Retrieval of Records7-32
      • [E] : IRS Requests for Documents, Information and Summonses7-33
        • [E][1] : LB&I Information Document Request Process: The Carrot and the Stick7-33
        • [E][2] : IDR Process: The Carrot7-34
        • [E][3] : Key Points of a Proper IDR7-35
        • [E][4] : IDR Enforcement Process: The Stick7-35
        • [E][5] : Key Points: IDR Enforcement Process7-35
      • [F] : Affirmative Issue7-39
      • [G] : Issue Resolution/Notices of Proposed Adjustments (NOPAs)7-40
      • [H] : Involvement of IRS Counsel, Specialists, and Technical Advisors7-42
      • [I] : Preliminary Strategies for Resolution7-43
      • [J] : Accounting Method Issues7-43
      • [K] : Impact on Future Years7-44
      • [L] : Estimated Completion Date7-45
      • [M] : Statute of Limitations7-45
      • [N] : Taxpayer’s Risk Analysis7-46
      • [O] : Agreements Reached During Prior Audits7-47
      • [P] : Rollover Settlements7-47
      • [Q] : IRS Accommodations7-47
      • [R] : Security and Disclosure Concerns7-48
      • [S] : Power of Attorney7-48
      • [T] : Audit Location7-49
      • [U] : Requests for Tax Returns of Corporate Officials—Compliance Check7-50
      • [V] : Be Familiar with Possible Alternative Dispute Resolutions Techniques7-51
      • [W] : Be Familiar with Publication 5125, Large Business and International Examination Process7-51
      • [X] : Closing Conferences7-52
      • [Y] : Resolution/Settlement Considerations7-53
  • § 7:6 : Appeals for LB&I Taxpayers7-55
    • § 7:6.1 : Pre-Conference Appeals Meeting7-55
    • § 7:6.2 : Opening Conference7-57
    • § 7:6.3 : Appeals Case Memorandums (ACMs)7-59
    • § 7:6.4 : Post-Settlement Conference7-60
  • § 7:7 : Joint Committee on Taxation (JCT)7-61
    • § 7:7.1 : Background7-61
    • § 7:7.2 : Joint Committee Criteria7-62
    • § 7:7.3 : Cases Not Required to Be Reportable to the JCT7-66
    • § 7:7.4 : Assessment Statute of Limitations and JCT7-68
    • § 7:7.5 : JCT Pending in Appeals7-69
    • § 7:7.6 : JCT Review7-70
    • § 7:7.7 : Claims Rejected by Joint Committee7-70
  • § 7:8 : Implication of State Tax Filings Resulting in Federal Adjustments7-71
  • § 7:9 : Rapid Appeals Process (RAP)7-74
  • § 7:10 : Compliance Assurance Program (CAP)7-74
    • § 7:10.1 : Three Phases of CAP7-76
      • [A] : Phase One: Pre-CAP7-76
      • [B] : Phase Two: CAP7-76
      • [C] : Phase Three: CAP Compliance Maintenance7-76
    • § 7:10.2 : Description of the CAP Program7-78
    • § 7:10.3 : Aspects of the Program7-78
    • § 7:10.4 : Memorandum of Understanding7-79
    • § 7:10.5 : Assignment of Account Coordinator7-79
    • § 7:10.6 : Post-Filing Review7-80
    • § 7:10.7 : Key Considerations7-81
  • § 7:11 : Prior LB&I Coordinated Issues (ISP, Tiered Issues, IPG & IPN)7-82
  • § 7:12 : Alternative Dispute Resolutions (ADRs)7-84
    • § 7:12.1 : Pre-Filing Agreement Program7-85
      • [A] : Exclusions7-86
      • [B] : PFA Statistics7-87
    • § 7:12.2 : Delegation Order 4-247-88
    • § 7:12.3 : Delegation Order 4-257-90
    • § 7:12.4 : Early Referral Program7-90
    • § 7:12.5 : Accelerated Issue Resolution (AIR)7-92
    • § 7:12.6 : Revenue Procedure 94-69: Qualified Amended Return7-93
    • § 7:12.7 : Superseded Returns Filed Prior to Expiration of Extended Due Date7-97
    • § 7:12.8 : Limited Issue-Focused Examination (LIFE)7-99
    • § 7:12.9 : Fast-Track Dispute Resolution Program: Fast-Track Settlement7-100
      • [A] : Overview7-100
      • [B] : FTS Procedures7-100
    • § 7:12.10 : Post-Appeals Mediation7-103
    • § 7:12.11 : Appeals Arbitration7-106
    • § 7:12.12 : Comprehensive Case Resolution (CCR)7-106
      • [A] : Industry Issue Resolution Program7-107
        • [A][1] : How the IIR Process Works7-108
        • [A][2] : Practical Aspects of IIR7-108
    • § 7:12.13 : Advanced Pricing Agreements (APA)7-109
      • [A] : The APA Process: Pre-Filing Conference7-111
      • [B] : The APA Process: APA Submission7-114
      • [C] : APA User Fees7-115
      • [D] : The APA Process: APA Annual Report7-116
    • § 7:12.14 : APAs: Rollback of Transfer Pricing Method7-116
    • § 7:12.15 : Advance Pricing and Mutual Agreement Program7-117
    • § 7:12.16 : Competent Authority Process (CAP)7-117
  • § 7:13 : Policy of Restraint—Tax Accrual Workpapers (TAW)7-121
    • § 7:13.1 : Overview7-121
      • [A] : Summary of Relevant Cases7-127
    • § 7:13.2 : Uncertain Tax Position: Schedule UTP7-132
      • [A] : Schedule UTP Filing Statistics7-133
  • Table 7-1 : Schedule UTP TY2014 Filing Statistics (as of March 2016)7-133
    • [B] : Announcements 2010-9, 2010-17, 2010-30, 2010-75, and 2010-767-134
  • Chart 7-2 : General Rules for Assessment and Refund Statutes for Income and Franchise Taxes7-142
Chapter 8: Statute of Limitations/Assessments/Summary Assessments
  • § 8:1 : Overview of Assessments8-3
    • § 8:1.1 : What Is an “Assessment”?8-4
    • § 8:1.2 : What Is the Filing Date of a Return?8-6
      • [A] : Early Return8-6
      • [B] : Return of Certain Employment Taxes8-7
      • [C] : Return Executed by Secretary8-7
      • [D] : Return of Excise Taxes8-8
    • § 8:1.3 : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid8-8
  • § 8:2 : Statute of Limitations—Assessments8-11
    • § 8:2.1 : False Return8-12
    • § 8:2.2 : Willful Attempt to Evade Tax8-13
    • § 8:2.3 : No Return8-13
    • § 8:2.4 : Extension by Agreement8-13
    • § 8:2.5 : Tax Resulting from Changes in Certain Income Tax, Gift Tax or Estate Tax Credits8-14
    • § 8:2.6 : Termination of Private Foundation Status8-15
    • § 8:2.7 : Special Rule for Certain Amended Returns8-15
    • § 8:2.8 : Failure to Notify Secretary of Certain Foreign Transfers8-15
    • § 8:2.9 : Gift Tax on Certain Gifts Not Shown on Return8-15
    • § 8:2.10 : Listed Transactions8-16
    • § 8:2.11 : Section 6501(c)(8)8-16
    • § 8:2.12 : Amended Returns8-20
    • § 8:2.13 : Filing Date Falls on Saturday, Sunday, or Legal Holiday8-21
    • § 8:2.14 : Superseding Returns Filed Prior to Expiration of Extended Due Date8-22
    • § 8:2.15 : Request for Prompt Assessment8-23
    • § 8:2.16 : Substantial Omission of Gross Income8-24
      • [A] : Information with Respect to Foreign Financial Assets8-30
    • § 8:2.17 : Personal Holding Company Tax8-31
    • § 8:2.18 : Incorrect Return Filed8-32
    • § 8:2.19 : Net Operating Loss or Capital Loss Carrybacks8-33
      • [A] : IRS’s Ability to Adjust Attributes in Closed Years for NOL Determinations8-35
      • [B] : Taxpayer’s Ability to Make Adjustments to Items in Closed Years for NOL Determinations8-36
    • § 8:2.20 : Foreign Tax Carrybacks8-39
    • § 8:2.21 : Credit Carrybacks8-40
    • § 8:2.22 : Tentative Carryback Adjustment Assessment Period8-40
    • § 8:2.23 : Pass-Through Entities (S Corporations, Partnerships, Trusts)8-41
  • § 8:3 : Collection After Assessment8-42
  • § 8:4 : Suspension of Assessment Statute8-43
    • § 8:4.1 : Issuance of Notice of Deficiency8-43
    • § 8:4.2 : Assets in Court Control or Custody8-45
    • § 8:4.3 : Taxpayer Outside United States8-45
    • § 8:4.4 : Extensions of Time for Payment of Estate Tax8-46
    • § 8:4.5 : Extensions of Time for Payment of Tax Attributable to Recoveries of Foreign Expropriation Losses8-46
    • § 8:4.6 : Wrongful Seizure8-46
    • § 8:4.7 : Wrongful Lien8-46
    • § 8:4.8 : Suspension Pending Correction8-47
    • § 8:4.9 : Cases Under Title 11 United States Code (Bankruptcy and Receiverships)8-47
    • § 8:4.10 : Extension of Time for Payment of Undistributed PFIC Earnings Tax Liability8-47
    • § 8:4.11 : Designated Summonses8-48
    • § 8:4.12 : Third-Party Summonses8-50
  • § 8:5 : Mitigation of the Statute of Limitations8-51
    • § 8:5.1 : Introduction8-51
    • § 8:5.2 : Purpose of the Mitigation Provisions8-52
    • § 8:5.3 : General Requirements8-53
      • [A] : Determination8-54
      • [B] : Some Bar to Adjustment8-55
      • [C] : Inconsistent Position8-55
        • [C][1] : What Meets the “Inconsistent Position” Requirement?8-56
        • [C][2] : Active Versus Passive “Inconsistent Position”8-58
        • [C][3] : Inconsistent Position Not Required8-59
    • § 8:5.4 : Existence of a Relationship8-60
    • § 8:5.5 : Circumstances of Adjustment8-61
    • § 8:5.6 : Problem Areas Under Section 1312 Circumstances of Adjustment8-63
    • § 8:5.7 : Method, Manner, and Procedure of Adjustment8-65
  • § 8:6 : Summary Assessments—Jeopardy and Termination Assessments8-66
    • § 8:6.1 : Jeopardy Levy Cases Outside Section 7429— Nature of Problem8-66
    • § 8:6.2 : Termination Assessments Defined8-68
    • § 8:6.3 : Jeopardy Assessments Defined8-70
    • § 8:6.4 : Presumption Where Owner of Large Amount of Cash Is Not Identified8-71
    • § 8:6.5 : Problem of Departing Aliens8-72
    • § 8:6.6 : Issuance of Notice of Deficiency8-74
    • § 8:6.7 : Amount Assessable8-75
    • § 8:6.8 : Taxpayer Remedies for Jeopardy and Termination Assessments8-75
      • [A] : Overview8-75
      • [B] : Posting Bond to Stay Collection8-76
      • [C] : Statutory Framework8-77
        • [C][1] : Administrative Review8-78
        • [C][2] : Judicial Review8-80
        • [C][3] : Finality of Court Determination8-82
        • [C][4] : Burden of Proof—In General8-83
        • [C][5] : Burden of Proof—Section 74918-89
        • [C][6] : Stay of Sale of Seized Property8-90
    • § 8:6.9 : Other Types of Immediate Assessment8-91
    • § 8:6.10 : Jeopardy Levy Procedures8-91
    • § 8:6.11 : Jeopardy Levy Cases Outside Section 74298-93
    • § 8:6.12 : Statute of Limitations for Refunds8-96
  Summary of New Developments Regarding Chapter 9, TEFRA
Chapter 9: TEFRA
  • § 9:1 : Overview of TEFRA9-3
    • § 9:1.1 : Prior Law9-3
    • § 9:1.2 : Overview9-4
    • § 9:1.3 : Significant Danger in TEFRA for Taxpayers9-6
    • § 9:1.4 : TEFRA/Non-TEFRA Determination9-6
    • § 9:1.5 : Some Key Differences Between TEFRA and Non-TEFRA Procedures9-10
    • § 9:1.6 : Special Enforcement Areas9-12
  • § 9:2 : New Terminology Under TEFRA9-13
    • § 9:2.1 : Tax Matters Partner (TMP)9-13
    • § 9:2.2 : Partner9-14
    • § 9:2.3 : Notice and Non-Notice Partner9-14
    • § 9:2.4 : Pass-Thru Partner9-14
    • § 9:2.5 : Indirect Partner9-14
    • § 9:2.6 : Investor9-14
    • § 9:2.7 : Notice Group and 5% Group9-15
    • § 9:2.8 : Partnership Item9-15
    • § 9:2.9 : Non-Partnership Item9-15
    • § 9:2.10 : Affected Item9-15
    • § 9:2.11 : Notice of Beginning of Administrative Proceeding (NBAP)9-16
    • § 9:2.12 : Sixty-Day Letter9-16
    • § 9:2.13 : Final Partnership Administrative Adjustment (FPAA)9-16
    • § 9:2.14 : Request for Administrative Adjustment (AAR)9-17
    • § 9:2.15 : Computational Adjustment9-17
    • § 9:2.16 : Inconsistent Treatment9-17
    • § 9:2.17 : Settlement Agreement9-18
    • § 9:2.18 : Consistent Treatment9-18
    • § 9:2.19 : Affected Items Statutory Notice of Deficiency9-18
    • § 9:2.20 : Foreign Partnerships9-18
  • § 9:3 : Tax Matters Partner (TMP)9-19
    • § 9:3.1 : Designation of the TMP9-19
    • § 9:3.2 : Authority and Responsibilities of the TMP9-21
      • [A] : Generally9-21
      • [B] : Treasury Regulation Section 301.6223(g)-19-23
      • [C] : TMP’s Responsibilities Under the Tax Court Rules9-24
        • [C][1] : Rule 241(f)(1)9-24
        • [C][2] : Rule 241(g)9-24
        • [C][3] : Rule 248(b)(3)9-24
        • [C][4] : Rule 248(c)(2)9-24
    • § 9:3.3 : Authority of Persons Other Than the TMP9-24
  • § 9:4 : Partnership Items/Non-Partnership Items/Affected Items9-27
    • § 9:4.1 : Partnership Items9-29
    • § 9:4.2 : Computational and Substantive Affected Items9-31
      • [A] : Outside Basis9-34
      • [B] : At-Risk9-35
      • [C] : Passive Losses9-35
      • [D] : Cancellation of Indebtedness (COD)9-36
    • § 9:4.3 : Non-Partnership Items9-36
      • [A] : Conversion9-36
      • [B] : Special Enforcement Areas9-37
      • [C] : Election to Treat Partnership Items As Non-Partnership Items9-40
      • [D] : Penalties9-40
  • § 9:5 : Examination of a TEFRA Partnership Return9-42
    • § 9:5.1 : Administrative Steps in an Audit of a TEFRA Return9-44
    • § 9:5.2 : Examination9-45
    • § 9:5.3 : TEFRA Appeals9-46
    • § 9:5.4 : Affected TEFRA Court Actions9-47
      • [A] : Court Filings by Tax Matters Partner Pursuant to Section 6226(a)9-47
      • [B] : Filing by Notice Partner or Representative of 5% Group Pursuant to Section 6226(b)9-48
      • [C] : Priority of Actions9-48
  • § 9:6 : TEFRA Settlement Procedures9-49
    • § 9:6.1 : Consistent Treatment9-51
      • [A] : In General9-51
      • [B] : Limitations on Requests for Consistent Treatment9-51
    • § 9:6.2 : Effect of Settlement9-53
      • [A] : General Rule of Conversion9-53
      • [B] : Nonapplicability of Section 6601(c)9-54
      • [C] : Partial Versus Complete Settlements9-54
    • § 9:6.3 : Docketed Tax Court Case Settlement Procedure9-55
  • § 9:7 : TEFRA Statute of Limitations on Assessment9-57
  • § 9:8 : TEFRA Assessments9-59
    • § 9:8.1 : Restriction on Assessment and Collection of Tax—General Rule9-59
    • § 9:8.2 : Exceptions to the General Rule9-60
    • § 9:8.3 : Assessment of Affected Items9-60
    • § 9:8.4 : Period of Limitations for Making Assessments of Affected Items9-61
    • § 9:8.5 : Computational Adjustments (Assessments)9-61
    • § 9:8.6 : Procedures to Challenge a Computational Adjustment9-62
  • § 9:9 : Administrative Adjustment Request Sections 6227 and 62289-64
    • § 9:9.1 : Introduction9-64
    • § 9:9.2 : Section 62279-65
      • [A] : Limits on Filing AARs9-65
      • [B] : TMP Filed AARs on Behalf of the Entire Partnership9-65
      • [C] : Partner Filed AARs Not on Behalf of Entire Partnership9-66
      • [D] : Time Limit for Making Refunds or Credits Under Section 62279-66
    • § 9:9.3 : Section 62289-66
      • [A] : Judicial Review of AARs on Behalf of Partnership9-66
      • [B] : Coordination of TMP Petitions Under Section 6228(a) and FPAAs for the Same Year9-67
      • [C] : Parties to Action, Scope of Judicial Review, and Review of Court Determination9-68
      • [D] : Judicial Review of AARs on Behalf of the Partner and Not the Partnership9-68
  • § 9:10 : Electing Large Partnerships9-69
    • § 9:10.1 : Definition of an Electing Large Partnership9-70
    • § 9:10.2 : Election Required to Be Treated As an ELP9-70
    • § 9:10.3 : Exclusions from ELP9-70
    • § 9:10.4 : Simplified Flow-Through to the Partners9-70
    • § 9:10.5 : Treatment of Partnership Items and Adjustments9-71
    • § 9:10.6 : Computing Imputed Underpayment9-72
    • § 9:10.7 : Partnership May Be Liable for Imputed Underpayment9-72
    • § 9:10.8 : Partnership Liable for Interest and Penalties9-72
    • § 9:10.9 : Partnership-Level Adjustments9-72
    • § 9:10.10 : Requests for Administrative Adjustment9-73
    • § 9:10.11 : Partner with Authority9-73
Chapter 10: Third-Party Liability
  • § 10:1 : Introduction: Transferee and Fiduciary Liability10-4
  • § 10:2 : Who Is the Transferee?10-4
  • § 10:3 : How Does Transferee Liability Arise?10-4
    • § 10:3.1 : At Law10-4
    • § 10:3.2 : In Equity10-8
  • § 10:4 : Extent of Liability of Transferee10-10
  • § 10:5 : Special Problem of Life Insurance Proceeds10-10
  • § 10:6 : Fiduciary Liability10-11
  • § 10:7 : IRS Procedures10-13
    • § 10:7.1 : Transferee Liability Cases10-13
    • § 10:7.2 : Fiduciary Liability Cases10-15
  • § 10:8 : Statute of Limitations10-16
    • § 10:8.1 : Assessment10-16
    • § 10:8.2 : Collection10-16
  • § 10:9 : Bankruptcy10-17
  • § 10:10 : Res Judicata10-18
  • § 10:11 : Introduction: Trust Fund Recovery Penalty for Employment Taxes10-23
  • § 10:12 : Penalty Equal to the Total Amount of Tax Evaded, Not Collected, or Not Accounted For and Paid Over10-25
  • § 10:13 : The Responsible Person10-27
    • § 10:13.1 : Tax-Exempt Organizations Exception: Taxpayer Bill of Rights 210-40
    • § 10:13.2 : Statute of Limitations on Assessment and Collection10-41
  • § 10:14 : Willfulness and Reasonable Cause10-43
  • § 10:15 : Requirement of Corporate Insolvency10-53
  • § 10:16 : Joint and Several Liability10-54
    • § 10:16.1 : Contribution Under the Taxpayer Bill of Rights 210-54
  • § 10:17 : Designation of Payments10-55
  • § 10:18 : Liability of Third Persons10-58
  • § 10:19 : Bankruptcy10-59
  • § 10:20 : Burden of Proof10-60
  • § 10:21 : Adjudicating the Controversy: Administrative and Judicial Remedies (Including Taxpayer Bill of Rights 2 and 3)10-65
  • § 10:22 : Criminal Liability: Employment Tax Enforcement Program10-67
    • § 10:22.1 : Employment Tax Schemes10-67
      • [A] : Pyramiding10-67
      • [B] : Employment Leasing10-68
      • [C] : Paying Employees in Cash10-68
      • [D] : Filing False Payroll Tax Returns or Failing to File Payroll Tax Returns10-68
      • [E] : Frivolous Arguments10-68
      • [F] : Offshore Employee Leasing10-68
      • [G] : Misclassifying Worker Status10-69
      • [H] : S Corporation Officers Compensation Treated As Corporate Distributions10-69
      • [I] : Filing False Payroll Tax Returns or Failing to File Payroll Tax Returns10-69
  • § 10:23 : Questionable Employment Tax Practice (QETP) Initiative Agreements10-70
    • § 10:23.1 : Introduction10-70
    • § 10:23.2 : QETP Definition10-70
    • § 10:23.3 : General Overview of the Program10-70
    • § 10:23.4 : Purpose of the MOU10-71
    • § 10:23.5 : MOU Participants10-71
    • § 10:23.6 : What Will Happen Under the MOU?10-72
    • § 10:23.7 : QETP and Taxpayer Privacy10-73
    • § 10:23.8 : QETP Beyond the MOU10-73
  • § 10:24 : Introduction: Innocent Spouse10-74
  • § 10:25 : Innocent Spouse Relief: Pre-Taxpayer Bill of Rights 310-74
    • § 10:25.1 : Innocent Spouse Relief: Taxpayer Relief Act of 199710-79
  • § 10:26 : Innocent Spouse and Separate Liability Elections: Taxpayer Bill of Rights 310-79
    • § 10:26.1 : Innocent Spouse Election10-80
      • [A] : Knowledge10-84
      • [B] : Inequitable10-93
      • [C] : Understatement10-97
      • [D] : Apportionment of Relief10-98
      • [E] : Burden of Proof10-99
    • § 10:26.2 : Separate Liability Election10-99
      • [A] : Burden of Proof10-100
      • [B] : Individuals Eligible to Make Election10-100
      • [C] : Time for Election10-102
      • [D] : Election Not Valid with Respect to Certain Deficiencies Involving “Actual Knowledge”10-102
      • [E] : Liability Increased by Reason of Transfers of Property to Avoid Tax10-106
      • [F] : Allocation of Deficiency10-107
    • § 10:26.3 : Tax Court Review10-110
    • § 10:26.4 : Equitable Relief: Revenue Procedure 2000-15 (Requests Before November 1, 2003)10-112
      • [A] : Eligibility to Be Considered for Equitable Relief: Threshold Conditions10-113
      • [B] : Circumstances Under Which Equitable Relief Under Section 6015(f) Will Ordinarily Be Granted10-114
      • [C] : Factors for Determining Whether to Grant Equitable Relief Under Section 66(c) or 6015(f)10-118
      • [D] : Procedures to Request Relief Under Section 6115(f) or 66(c)10-123
      • [E] : Effective Date10-123
      • [F] : Burden of Proof: Abuse of Discretion Standard?10-128
      • [G] : Fact-Sensitive Cases10-129
    • § 10:26.5 : Equitable Relief: Revenue Procedure 2003-61 (Requests On or After November 1, 2003)10-130
      • [A] : Eligibility for Equitable Relief10-131
      • [B] : Circumstances Under Which the IRS Ordinarily Will Grant Equitable Relief Under Section 6015(f)10-134
      • [C] : Factors for Determining Whether to Grant Equitable Relief10-135
      • [D] : Refunds10-138
      • [E] : Procedure10-139
      • [F] : Effective Date10-139
      • [G] : Burden of Proof: Abuse of Discretion Standard?10-139
    • § 10:26.6 : Equitable Relief: Revenue Procedure 2013-34 (Requests on or After September 16, 2013)10-141
      • [A] : Eligibility for Equitable Relief10-144
      • [B] : Circumstances Under Which the IRS Will Make Streamline Determinations Granting Equitable Relief Under Sections 66(c) and 6015(f)10-147
      • [C] : Factors for Determining Whether to Grant Equitable Relief10-148
      • [D] : Refunds10-156
      • [E] : Procedure10-157
      • [F] : Effective Date10-157
    • § 10:26.7 : Forms: Innocent Spouse Relief and Injured Spouse Claim10-157
    • § 10:26.8 : Common Problems10-159
    • § 10:26.9 : Effect of Innocent Spouse Relief on Other Spouse10-160
    • § 10:26.10 : Types of Relief Requested and Impact on Collection10-160
    • § 10:26.11 : Effect of Prior Closing Agreement or Offer in Compromise10-162
    • § 10:26.12 : Effect of Fraud10-164
    • § 10:26.13 : Scope of Section 601510-164
    • § 10:26.14 : Time and Manner for Requesting Relief10-165
    • § 10:26.15 : Notice to Nonrequesting Spouse10-168
    • § 10:26.16 : Credits, Refunds, and Res Judicata10-171
      • [A] : In General10-171
      • [B] : Res Judicata10-172
      • [C] : Credit and Refund Not Available Under Section 6015(c)10-175
    • § 10:26.17 : Effect of a Previous Chapter 7 Bankruptcy10-176
Chapter 11: Summons Power and Third-Party Contacts
  • § 11:1 : Nature and Scope of the Summons Power11-2
  • § 11:2 : Enforcement of the Summons11-9
    • § 11:2.1 : The Powell Requirements11-15
      • [A] : Legitimate Purpose11-15
        • [A][1] : Sole Criminal Purpose11-15
        • [A][2] : Dual Purpose Summonses11-21
      • [B] : Relevance11-24
      • [C] : Documents Not Already Possessed by the Service11-29
      • [D] : Administrative Procedures11-33
    • § 11:2.2 : Evidentiary Hearings and Discovery11-37
    • § 11:2.3 : Request from a Foreign Government11-39
  • § 11:3 : Third-Party Summonses11-40
    • § 11:3.1 : Pre-Taxpayer Bill of Rights 311-40
    • § 11:3.2 : Taxpayer Bill of Rights 311-44
      • [A] : Taxpayer Bill of Rights 3 and Service by Mail to Third-Party Recordkeepers11-53
  • § 11:4 : “John Doe” Summons11-55
  • § 11:5 : Defenses to Summons Enforcement Actions11-56
    • § 11:5.1 : Powell Defenses11-57
    • § 11:5.2 : Privileges11-57
      • [A] : Attorney-Client Privilege and Tax Practitioner Privileges11-57
      • [B] : Work Product Doctrine11-67
      • [C] : Fifth Amendment Privilege11-70
    • § 11:5.3 : Miscellaneous Defenses11-78
  • § 11:6 : Suspension of Statute of Limitations11-80
    • § 11:6.1 : Miscellaneous Changes Made by Taxpayer Bill of Rights 211-81
    • § 11:6.2 : Designated Summonses and Related Summonses11-81
    • § 11:6.3 : Formal Document Request Under Section 98211-84
  • § 11:7 : Notice of Contact of Third Parties11-86
    • § 11:7.1 : Notice of Contact of Third Parties: Final Regulations11-87
      • [A] : Third-Party Contacts: In General11-87
      • [B] : “Initiated by an IRS Employee”11-88
      • [C] : “Person Other Than the Taxpayer”11-90
      • [D] : “With Respect to the Determination or Collection” of Tax11-91
      • [E] : “Discloses the Identity of the Taxpayer Being Investigated”11-96
      • [F] : “Discloses the Association of the IRS Employee”11-96
      • [G] : Pre-Contact Notice Requirement11-97
      • [H] : Post-Contact Reports Requirement11-97
      • [I] : Exceptions11-102
      • [J] : Effective Date11-108
      • [K] : Taxpayer Remedy11-108
    • § 11:7.2 : IRS Contact Letters11-108
Chapter 12: Major Civil Penalties; and Appendix 12A
  • § 12:1 : Introduction to Civil Penalties12-7
  • § 12:2 : Reasonable Cause: The Almost Global Defense12-10
    • § 12:2.1 : Reasonable Cause Exception to Section 6662 Penalties12-12
    • § 12:2.2 : Facts and Circumstances Taken into Account12-13
    • § 12:2.3 : Ordinary Business Care and Prudence12-15
    • § 12:2.4 : Reliance on Opinion or Advice12-16
    • § 12:2.5 : Written Advice from the IRS12-22
    • § 12:2.6 : Oral Advice from the IRS12-23
    • § 12:2.7 : Ignorance of the Law12-23
    • § 12:2.8 : Mistake Was Made12-24
    • § 12:2.9 : Death, Serious Illness, or Unavoidable Absence12-25
    • § 12:2.10 : Administrative Waiver12-25
    • § 12:2.11 : Fire, Casualty, Natural Disaster, or Other Disturbance12-26
    • § 12:2.12 : Official Disaster Area12-26
    • § 12:2.13 : Reasonable Cause Exceptions Expanded12-26
    • § 12:2.14 : Reasonable Cause in TEFRA Cases12-27
    • § 12:2.15 : Examples of Reasonable Cause in Failure to File and Failure to Pay Cases12-30
    • § 12:2.16 : Reasonable Cause Defense for Preparers12-33
  • § 12:3 : Penalties Imposed on the Taxpayer12-35
    • § 12:3.1 : Failure to Timely File Tax Return12-36
    • § 12:3.2 : Fraudulent Failure to File12-38
    • § 12:3.3 : Failure-to-Pay12-39
      • [A] : Mitigation of Penalty for Individual’s Failure to Pay During Period of Installment Agreement12-43
    • § 12:3.4 : Estimated Taxes12-44
      • [A] : Failure by an Individual to Pay Estimated Income Tax (Section 6654)12-45
      • [B] : Failure by a Corporation to Pay Estimated Income Tax (Section 6655)12-47
        • [B][1] : Annualized Income Installment or Adjusted Seasonal Installment Method12-48
    • § 12:3.5 : Accuracy-Related Penalties12-48
      • [A] : In General12-48
      • [B] : Negligence or Disregard of Rules or Regulations12-51
        • [B][1] : Negligence12-54
        • [B][2] : Reasonable Basis12-57
        • [B][3] : Disregard of Rules and Regulations12-57
        • [B][4] : Disclosure, Reasonable Cause, and Good Faith12-58
        • [B][5] : Exception for Adequate Disclosure12-59
        • [B][6] : Method of Making Disclosure12-59
          • [B][6][a] : Comprehensive12-60
        • [B][7] : Burden of Proof12-61
      • [C] : Any Substantial Understatement of Income Tax12-62
        • [C][1] : In General12-62
        • [C][2] : Special Rules in the Case of Carryovers12-63
        • [C][3] : Substantial Authority Standard12-63
        • [C][4] : Determination of Whether Substantial Authority Is Present: Evaluation of Authorities12-64
        • [C][5] : Determination of Whether Substantial Authority Is Present: Nature of Analysis12-64
        • [C][6] : Determination of Whether Substantial Authority Is Present: Types of Authority12-65
        • [C][7] : Determination of Whether Substantial Authority Is Present: Special Rules12-66
          • [C][7][a] : Written Determinations12-66
          • [C][7][b] : Taxpayer’s Jurisdiction12-67
          • [C][7][c] : When Substantial Authority Is Determined12-67
          • [C][7][d] : List of Positions12-67
        • [C][8] : Adequate Disclosure12-68
        • [C][9] : Method of Making Adequate Disclosure12-68
      • [D] : Any Substantial Valuation Misstatement12-70
        • [D][1] : Transfer Pricing Underpayments12-71
        • [D][2] : Substantial Valuation Misstatement12-72
        • [D][3] : Specified Method with Documentation Exclusion12-73
        • [D][4] : Foreign-to-Foreign Transaction Exclusion12-73
        • [D][5] : 2001 Report on the Effectiveness of Section 6662(e)12-74
      • [E] : Any Substantial Overstatement of Pension Liabilities12-75
      • [F] : Any Substantial Estate or Gift Tax Valuation Understatement12-75
      • [G] : Any Disallowance of Claimed Tax Benefits by a Transaction Lacking Economic Substance (Within the Meaning of Section 7701(o)) or Failing to Meet the Requirements of Any Similar Rule of Law12-75
        • [G][1] : Discussion of Economic Substance Doctrine12-76
      • [H] : Penalties for Underpayments Attributable to Undisclosed Foreign Financial Assets12-82
      • [I] : Increase in Penalty in Case of Gross Valuation Misstatements12-84
    • § 12:3.6 : Civil Fraud12-85
      • [A] : Pre-1987 Tax Returns12-85
      • [B] : Pre-1990 Tax Returns12-86
      • [C] : Post-1989 Tax Returns12-86
      • [D] : The Meaning of Fraud12-87
    • § 12:3.7 : International Penalties12-94
      • [A] : Section 603812-96
        • [A][1] : Substantial Compliance12-97
        • [A][2] : Reasonable Cause Defense to Section 603812-102
      • [B] : Section 6721 and 6722 and Intentional Disregard Penalties12-103
    • § 12:3.8 : Sanctions and Costs for Delay or Frivolity (Section 6673)12-104
    • § 12:3.9 : Frivolous Tax Returns and Submissions (Section 6702)12-107
      • [A] : Tax Relief and Health Care Act of 200612-107
        • [A][1] : Penalty for Frivolous Returns12-107
        • [A][2] : Penalty for Frivolous Submissions12-108
        • [A][3] : Listing of Frivolous Positions12-108
        • [A][4] : Reduction of Penalty12-109
        • [A][5] : Penalty in Addition to Other Penalties12-109
        • [A][6] : Effective Date12-109
    • § 12:3.10 : Erroneous Claim for Refund or Credit Penalty12-109
      • [A] : Section 667612-109
      • [B] : Calculation of the Section 6676 Penalty12-111
    • § 12:3.11 : Civil FBAR Penalties12-112
      • [A] : Willful Standard and Burden of Proof12-116
      • [B] : Is a Foreign Credit Card a Financial Account?12-118
      • [C] : Ignorance, Education, and Outreach12-119
    • § 12:3.12 : TEFRA Partnership Penalties12-119
  • § 12:4 : Penalties Imposed on Preparers, Promoters, and Material Advisors12-120
    • § 12:4.1 : Understatement of Taxpayer’s Liability by Tax Return Preparer (Section 6694)12-121
      • [A] : Section 6694—Historical Perspective12-122
      • [B] : Section 6694—Current Perspective12-127
      • [C] : Who Is a Tax Return Preparer?12-128
      • [D] : One Preparer Per Position Per Firm12-130
      • [E] : Examples of “Tax Returns”12-132
      • [F] : Return Affecting Related Entries12-134
      • [G] : Income Derived or to Be Derived12-135
      • [H] : Definition of Tax Return Preparer12-136
      • [I] : Who Is Not a Tax Return Preparer?12-137
      • [J] : Date Return Is Deemed Prepared12-139
    • § 12:4.2 : Understatements Due to Unreasonable Positions (Being Sustained on the Merits)12-139
      • [A] : Exception for Adequate Disclosure of Reasonable Basis Position12-143
    • § 12:4.3 : Understatements Due to Willful or Reckless Conduct (Section 6694(b))12-146
      • [A] : Exceptions for Adequate Disclosure, Etc.12-147
      • [B] : Section 6694 Returns and Claims for Refund12-148
      • [C] : Procedures for Assessment and Collection of Penalty12-149
      • [D] : Burden of Proof12-150
      • [E] : Administrative Appeal Rights and Abatement of Penalty12-151
    • § 12:4.4 : Other Penalties for Income Tax Return Preparers (Section 6695)12-153
    • § 12:4.5 : Injunctions Against Tax Return Preparers12-157
    • § 12:4.6 : OPR Referrals of Assessed Preparer Penalties12-158
    • § 12:4.7 : Improper Disclosure of Information12-160
    • § 12:4.8 : Monetary Penalties Under the Jobs Act12-163
    • § 12:4.9 : Substantial and Gross Valuation Misstatements Attributable to Incorrect Appraisals12-165
    • § 12:4.10 : Penalties for Aiding and Abetting Understatement of Tax Liability (Section 6701)12-165
    • § 12:4.11 : Procedures Applicable to Penalties Found in Sections 6700 and 670112-167
  • § 12:5 : Penalties Imposed on the IRS12-170
    • § 12:5.1 : Unauthorized Inspection or Disclosure of Returns and Unauthorized Collection Actions12-170
    • § 12:5.2 : Suspension of Interest and Penalties Where the IRS Fails to Contact the Taxpayer (Section 6404(g))12-178
      • [A] : Notice Requirement: IRS Position12-179
      • [B] : Tax Court Litigation12-180
      • [C] : Voluntary Reporting of Additional Taxes12-180
      • [D] : Final Regulations Issued12-181
    • § 12:5.3 : Interest on Taxes Abated in Federally Declared Disaster Areas12-181
      • [A] : Required Notices12-181
    • § 12:5.4 : Designation of Tax Deposits to Mitigate the Failure-to-Deposit Penalty (Section 6656)12-182
  • § 12:6 : Procedural Rules—Requesting Penalty Relief12-182
    • § 12:6.1 : Assessable Penalties12-182
    • § 12:6.2 : Post-Assessment Review12-183
    • § 12:6.3 : Pre-Assessment Review by Appeals12-185
    • § 12:6.4 : Deficiency Procedures12-186
    • § 12:6.5 : Appeals Review of International Penalties12-187
    • § 12:6.6 : Penalty Abatement Request12-188
    • § 12:6.7 : Qualified Amended Return and Revenue Procedure 94-6912-189
  • § 12:7 : Additional Penalties for Tax Shelters/Reportable Transactions12-192
    • § 12:7.1 : Historical Perspective12-192
      • [A] : Office of Tax Shelter Analysis12-193
    • § 12:7.2 : Federal Tax Shelter Rules12-193
    • § 12:7.3 : Transactions Entered into Before January 1, 200312-194
      • [A] : Listed Transaction (or Substantially Similar Listed Transaction)12-195
      • [B] : Other Reportable Transactions (Potentially Abusive Tax Shelter)12-196
    • § 12:7.4 : General Disclosure Principles (Section 6011)12-198
      • [A] : Additional Modifications12-200
      • [B] : Final Regulations12-200
        • [B][1] : In General12-200
        • [B][2] : Listed Transactions12-201
          • [B][2][a] : Listed Transactions in Chronological Order12-202
        • [B][3] : Reportable Transactions12-204
          • [B][3][a] : Confidential Transactions12-204
          • [B][3][b] : Transactions with Contractual Protection12-205
          • [B][3][c] : Loss Transactions12-206
        • [B][4] : Transactions of Interest12-209
      • [C] : Transactions Involving a Brief Asset Holding Period12-210
      • [D] : Special Participation Rules for Reporting Shareholders12-211
        • [D][1] : Definition of “Reporting Shareholder”12-211
        • [D][2] : Reportable Transactions12-212
      • [E] : Disclosure12-212
        • [E][1] : Special Rules12-212
        • [E][2] : Registration Numbers12-213
      • [F] : Record Retention Requirements12-213
  • § 12:8 : Registration of Tax Shelters; Material Advisors12-214
  • § 12:9 : State Tax Shelter Rules12-216
  • § 12:10 : Special Rules for Reasonable Cause Defense to Tax Shelter Items12-216
  • § 12:11 : Reportable Transactions Penalty12-217
    • § 12:11.1 : Reportable Transaction Understatement12-218
    • § 12:11.2 : Item Defined12-218
    • § 12:11.3 : Higher Penalty for Nondisclosed Items12-218
    • § 12:11.4 : Section 6662A Reasonable Cause Exception12-219
    • § 12:11.5 : Definitions of Reportable and Listed Transactions12-220
    • § 12:11.6 : Special Rules: Coordination with Penalties on Other Understatements12-221
    • § 12:11.7 : Special Rules: Coordination with Other Penalties12-221
    • § 12:11.8 : Special Rule for Amended Returns12-221
    • § 12:11.9 : Interest on Unpaid Taxes Attributable to Non-Disclosed Reportable Transactions12-222
  • § 12:12 : Promoting Abusive Tax Shelters (Section 6700)12-222
  • § 12:13 : Taxpayer’s Failure to Include Reportable Transaction Information with Return (Section 6707A)12-224
    • § 12:13.1 : Imposition of Penalty12-225
    • § 12:13.2 : Failure to Disclose—Extension of the Statute of Limitations12-225
    • § 12:13.3 : Amount of Penalty12-225
    • § 12:13.4 : Definitions12-226
    • § 12:13.5 : Authority to Rescind Penalty12-226
    • § 12:13.6 : No Judicial Appeal12-227
    • § 12:13.7 : Penalty Reported to the SEC12-227
    • § 12:13.8 : Coordination with Other Penalties12-228
    • § 12:13.9 : Reporting by the Commissioner12-229
  • § 12:14 : Actions to Enjoin Promoters of Abusive Tax Shelters and Other Individuals and Conduct12-229
  • § 12:15 : Failure to Furnish Information Regarding Reportable Transactions (Section 6707)12-230
  • § 12:16 : Investor List Maintenance Requirements12-232
    • § 12:16.1 : Background12-232
    • § 12:16.2 : Persons Required to Maintain Lists of Investors and Composition of the Lists12-233
    • § 12:16.3 : Maintaining the List12-234
    • § 12:16.4 : Furnishing the List to the IRS12-234
    • § 12:16.5 : Failure-to-Maintain-List Penalty12-235
  • § 12:17 : Failure to Maintain Lists of Advisees with Respect to Reportable Transactions12-235
  • § 12:18 : Excise Tax on Certain Tax-Exempt Entities Entering into Prohibited Tax Shelter Transactions12-236
    • § 12:18.1 : Background12-236
    • § 12:18.2 : Being a Party to or Approving of Prohibited Transactions12-236
      • [A] : Tax-Exempt Entity12-236
      • [B] : Entity Manager12-236
      • [C] : Tax Imposed on Entity: No Knowledge or Reason to Know12-237
      • [D] : Tax Imposed on Entity: Knowing or Reason to Know12-238
      • [E] : Tax Imposed on Entity Manager12-239
    • § 12:18.3 : Tax-Exempt Entity Defined12-239
    • § 12:18.4 : Entity Manager Defined12-240
    • § 12:18.5 : Disclosure Requirements12-240
    • § 12:18.6 : Prohibited Tax Shelter Transaction Defined12-241
    • § 12:18.7 : Subsequently Listed Transaction Defined12-242
    • § 12:18.8 : Regulatory Authority12-242
    • § 12:18.9 : Coordination with Other Taxes and Effective Date12-242
  • Appendix 12A : Summary Chart for Civil Tax-Related PenaltiesApp. 12A-1
Chapter 13: Civil and Criminal Tax Fraud; and Appendix 13A
  • § 13:1 : Introduction13-4
  • § 13:2 : Four Major Tax Crimes13-9
    • § 13:2.1 : Shorthand Formula for Any Criminal Tax Case13-9
    • § 13:2.2 : Section 7201 Attempt to Evade or Defeat Tax13-10
      • [A] : Additional Tax Due and Owing13-13
      • [B] : Defendant Knew More Federal Income Tax Was Owed13-17
      • [C] : Affirmative Attempt to Evade or Defeat13-17
      • [D] : Defendant Acted Willfully13-22
      • [E] : Civil Fraud Considerations13-32
    • § 13:2.3 : Section 7206(1) Fraud and False Statement13-34
      • [A] : Return, Statement, or Document13-36
      • [B] : “Makes” Any Return, Statement, or Document13-39
      • [C] : “Subscribes” Any Return, Statement, or Document13-40
      • [D] : Made Under Penalties of Perjury13-42
      • [E] : False Material Matter13-43
      • [F] : Willfulness—Does Not Believe to Be True and Correct13-53
    • § 13:2.4 : Section 7206(2) Assisting in the Preparation of a False Return13-56
      • [A] : Aiding and Assisting13-58
      • [B] : False Material Matter13-63
      • [C] : Willfulness13-64
    • § 13:2.5 : 18 U.S.C. § 371 Conspiracy to Commit Offense or to Defraud the United States13-66
      • [A] : Agreement13-68
      • [B] : Membership13-70
      • [C] : Overt Act13-72
      • [D] : The Klein Conspiracy: Conspiracy to Defraud the United States13-74
    • § 13:2.6 : General Observations About These Four Tax Crimes13-96
    • § 13:2.7 : Proof Beyond a Reasonable Doubt in a Tax Prosecution13-96
    • § 13:2.8 : Common Defenses Raised in Tax Prosecutions13-97
      • [A] : Good Faith13-97
      • [B] : Reliance on Return Preparer/Accountant13-99
      • [C] : Reliance on Advice of Counsel13-100
      • [D] : Cheek No Defense in Non-Tax Cases13-101
      • [E] : Fifth Amendment—Freedom from Self-Incrimination13-102
      • [F] : IRS Deception13-105
      • [G] : Selective Prosecution Defense13-107
    • § 13:2.9 : Methods of Proving the Tax Deficiency13-109
      • [A] : In General13-110
      • [B] : Specific Items Method of Proof13-113
      • [C] : Bank Deposits Method of Proof13-114
      • [D] : Net Worth Method of Proof13-121
      • [E] : Expenditures Method of Proof13-125
      • [F] : The Cash Method of Proof13-128
      • [G] : Percentage Mark-Up13-128
    • § 13:2.10 : Proving Willfulness—Badges of Fraud13-128
      • [A] : Classic Spies Badges of Fraud13-129
      • [B] : More Badges of Fraud13-129
      • [C] : Additional Badges of Fraud from Former IRM 94013-131
      • [D] : Badges of Fraud in Civil Cases13-133
    • § 13:2.11 : Final Comments on Willfulness13-137
  • § 13:3 : Other Tax Crimes13-140
    • § 13:3.1 : Section 7203 Willful Failure to File Return, Supply Information, or Pay Tax13-141
    • § 13:3.2 : Section 7207 Fraudulent Returns, Statements, or Other Documents13-142
    • § 13:3.3 : Section 7202 Willful Failure to Collect or Pay Tax13-142
    • § 13:3.4 : Section 7204 Fraudulent Statement or Failure to Make Statement to Employees13-143
    • § 13:3.5 : Section 7205 Fraudulent Withholding Exemptions Certificate or Failure to Supply Information13-145
    • § 13:3.6 : Fraud and False Statements13-146
      • [A] : Section 7206(3) Fraudulent Bonds, Permits, and Entries13-146
      • [B] : Section 7206(4) Removal or Concealment with Intent to Defraud13-146
      • [C] : Section 7206(5) Compromises and Closing Agreements13-146
    • § 13:3.7 : Section 7210 Failure to Obey Summons13-147
    • § 13:3.8 : Section 7212 Attempts to Interfere with Administration of Internal Revenue Laws13-147
    • § 13:3.9 : Section 7213(a)(1)–(4) Unauthorized Disclosure of Returns and Return Information13-149
    • § 13:3.10 : Section 7216 Disclosure or Use of Information by Preparers of Tax Returns13-149
    • § 13:3.11 : Section 7214(a) Offenses by Officers and Employees of the United States13-151
  • § 13:4 : Statute of Limitations13-152
  • § 13:5 : Evolution of a Criminal Tax Case13-154
    • § 13:5.1 : Pre-CI Referral—the Eggshell Audit13-155
    • § 13:5.2 : Fraud Technical Advisor13-156
    • § 13:5.3 : IRS Criminal Referrals13-157
    • § 13:5.4 : Investigation by CI—Administrative Versus Grand Jury Investigations13-163
      • [A] : Background13-163
      • [B] : Administrative Investigation13-164
      • [C] : Grand Jury Investigation13-165
    • § 13:5.5 : Authorization by Department of Justice Tax Division13-166
    • § 13:5.6 : Government’s Standard of Review for a Criminal Tax Case13-166
  • § 13:6 : How to Spot a Criminal Investigation13-167
  • § 13:7 : Representing the Taxpayer Before Indictment in a Criminal Investigation13-170
  • § 13:8 : Voluntary Disclosure13-174
    • § 13:8.1 : In General13-175
    • § 13:8.2 : Voluntary Disclosure—July 16, 2002 Version13-179
    • § 13:8.3 : Voluntary Disclosure—Revised December 11, 2002 Version13-180
    • § 13:8.4 : Voluntary Disclosure—Revised September 9, 2004 Version13-185
    • § 13:8.5 : Voluntary Disclosure—Revised March 26, 2009 Version, Regarding Secret Foreign Bank Accounts13-190
    • § 13:8.6 : Voluntary Disclosure—Revised June 26, 2009 Version13-193
    • § 13:8.7 : Voluntary Disclosure—Revised December 2, 2009 Version13-196
    • § 13:8.8 : Voluntary Disclosure For Swiss Banks—August 29, 201313-199
    • § 13:8.9 : General Procedures for Voluntary Disclosure13-202
      • [A] : Make Sure There Is No Triggering Event13-202
      • [B] : Tell the Client He Will Be Identified to the IRS13-203
      • [C] : Do Not Incriminate the Client13-203
      • [D] : Move Quickly13-205
      • [E] : Do Not File Fraudulent Amended Returns13-205
      • [F] : File Enough Returns13-205
      • [G] : Quiet or Noisy Voluntary Disclosure?13-206
  • § 13:9 : Dual Prosecution13-207
  • § 13:10 : Miranda Warnings13-208
  • § 13:11 : IRS Undercover Operations13-210
  • § 13:12 : Government Violation of Taxpayer Bill of Rights13-215
  • § 13:13 : Parallel Investigations13-217
    • § 13:13.1 : Permitted Parallel Investigations13-220
    • § 13:13.2 : Background13-220
    • § 13:13.3 : Government Participants in Six-Way Conference13-221
    • § 13:13.4 : Goals and Topics Discussed in Six-Way Conference13-222
    • § 13:13.5 : Factors and Determinations in Parallel Investigations13-223
    • § 13:13.6 : Sharing Information13-223
    • § 13:13.7 : Coordination of Participant Examinations13-225
    • § 13:13.8 : Parallel Investigations and Collection Matters13-225
    • § 13:13.9 : Evidentiary Problem in the Parallel Investigation13-226
  • § 13:14 : Phishing Initiative13-226
  • § 13:15 : Whistleblower Program13-227
    • § 13:15.1 : Introduction13-227
    • § 13:15.2 : Awards in General13-229
    • § 13:15.3 : Awards in Cases of Less Substantial Contribution13-230
    • § 13:15.4 : Reduction in or Denial of Award13-231
    • § 13:15.5 : Appeal of Award Determination13-231
    • § 13:15.6 : Additional Rules13-231
    • § 13:15.7 : Effective Date13-232
    • § 13:15.8 : Above the Line Deduction for Attorneys’ Fees and Court Costs13-232
  • § 13:16 : Whistleblower Office13-232
    • § 13:16.1 : Establishment of Office and Guidance13-232
    • § 13:16.2 : Operation of Office13-232
    • § 13:16.3 : Request for Assistance13-233
    • § 13:16.4 : Report by Secretary13-233
  • Appendix 13A : Criminal Penalties in Tax Related MattersApp. 13A-1
Chapter 14: Administrative Appeal
  • § 14:1 : Introduction14-3
    • § 14:1.1 : Organization of the Appeals Office14-5
  • § 14:2 : 2014 Appeals Policy: Appeals Judicial Attitude and Culture (AJAC)14-8
  • § 14:3 : When Can Taxpayers File an Appeal?14-9
  • § 14:4 : Must the Service Grant an Appeal?14-10
  • § 14:5 : How to Appeal14-11
    • § 14:5.1 : Procedural Requirements14-11
    • § 14:5.2 : Written Protest14-12
    • § 14:5.3 : Rebuttal to Taxpayer Protest14-16
    • § 14:5.4 : Appeals’ Representation14-18
    • § 14:5.5 : Appeals Conference14-19
  • § 14:6 : Ex Parte Communications Prohibited14-22
    • § 14:6.1 : General Definition of “Ex Parte”14-23
    • § 14:6.2 : Types of Communications Prohibited14-23
    • § 14:6.3 : Types of Communications Not Prohibited14-23
    • § 14:6.4 : Administrative File Not a Communication14-24
    • § 14:6.5 : Preliminary Review Considerations14-25
    • § 14:6.6 : Premature Appeals14-27
    • § 14:6.7 : New Issues Raised by Taxpayer14-28
    • § 14:6.8 : Ongoing Communications with Originating Function14-28
    • § 14:6.9 : New Facts or Evidence14-28
    • § 14:6.10 : Communications with Counsel14-29
    • § 14:6.11 : Joint Committee Communications14-30
    • § 14:6.12 : Taxpayer Advocate Service14-31
    • § 14:6.13 : Outside Experts14-31
    • § 14:6.14 : “Opportunity to Participate”14-31
    • § 14:6.15 : Waiver14-32
    • § 14:6.16 : Pre-Settlement and Post-Settlement Conferences14-33
    • § 14:6.17 : Compliance and Taxpayer Remedies14-34
  • § 14:7 : Negotiations, Settlement Practices, and the Hazards of Litigation14-41
    • § 14:7.1 : Hazards of Litigation14-41
    • § 14:7.2 : Controlling Law: Golsen Rule14-43
    • § 14:7.3 : Settlements in General14-44
    • § 14:7.4 : Mutual Concession Settlements14-45
    • § 14:7.5 : Split-Issue Settlements14-46
    • § 14:7.6 : Nuisance Value Settlements14-46
    • § 14:7.7 : Qualified Settlement Offer14-47
    • § 14:7.8 : Technical Advice14-48
    • § 14:7.9 : Appeals Case Memorandums (ACMs)14-49
    • § 14:7.10 : Docketed Cases14-49
    • § 14:7.11 : New Issues14-50
    • § 14:7.12 : Whipsaw Issues14-51
    • § 14:7.13 : Penalties14-52
    • § 14:7.14 : Settlements That Affect Later Taxable Years14-53
    • § 14:7.15 : Agreement Forms14-53
      • [A] : Forms 870 and 870-AD14-53
        • [A][1] : Form 870-AD and Equitable Estoppel14-54
        • [A][2] : Duty of Consistency14-56
      • [B] : Closing Agreements14-57
      • [C] : Settlement Agreements in Docketed Tax Court Cases14-61
      • [D] : Collateral Agreements Distinguished14-61
  • § 14:8 : Joint Committee Cases14-62
  • § 14:9 : Alternative Dispute Resolution14-63
    • § 14:9.1 : Post-Appeals Mediation14-63
      • [A] : Confidentiality and Ex Parte14-67
      • [B] : Appeals Procedures Apply14-67
      • [C] : Practical Observations14-68
    • § 14:9.2 : Appeals Arbitration Program14-69
      • [A] : Scope of Arbitration: When Is Arbitration Available?14-70
      • [B] : Application Process14-71
      • [C] : Arbitration Session14-71
      • [D] : Post-Session Procedure14-72
  • § 14:10 : Appeals Coordinated Issues14-72
  • § 14:11 : Technical Advisor14-73
  • § 14:12 : Coordinated and Appeals Emerging Issues14-73
    • § 14:12.1 : Compliance Coordinated Issues14-73
    • § 14:12.2 : ACI14-74
    • § 14:12.3 : Appeals EM14-74
  • § 14:13 : Unagreed Non-Docketed Case: Issues Not Resolved in Appeals14-75
  • § 14:14 : Collection Due Process Hearing14-75
    • § 14:14.1 : Requesting a CDP Hearing14-76
    • § 14:14.2 : Suspension of Collections14-76
    • § 14:14.3 : CDP Hearing14-77
    • § 14:14.4 : Form 9423, Collection Appeal Request14-78
    • § 14:14.5 : Judicial Review of CDP Determination14-80
  • § 14:15 : Rapid Response Appeals Process (RRAP)14-83
  • § 14:16 : Can the Taxpayer Record a Collection Due Process Hearing with Appeals?14-85
    • § 14:16.1 : Legal Basis and Background for Recording14-85
    • § 14:16.2 : IRS Interpretation of the Law and Former Policy14-85
    • § 14:16.3 : Tax Court’s View in Keene v. Commissioner14-86
    • § 14:16.4 : Current IRS Position14-89
    • § 14:16.5 : Evolution of Keene v. Commissioner14-90
Chapter 15: Tax Court Litigation and Claims for Refunds
  • § 15:1 : Introduction15-5
  • § 15:2 : Organization of Tax Court15-5
    • § 15:2.1 : In General15-5
    • § 15:2.2 : Matters Allowed to the Special Trial Judges15-7
    • § 15:2.3 : Jurisdiction Overview15-7
    • § 15:2.4 : Jurisdiction Over Deficiency Proceedings15-8
      • [A] : Valid Statutory Notice of Deficiency15-9
        • [A][1] : Existence of a Deficiency15-9
        • [A][2] : Deficiency Tax15-9
        • [A][3] : The Last Known Address Issue15-10
        • [A][4] : The Scar Issue15-10
        • [A][5] : Motion to Dismiss for Lack of Jurisdiction15-11
      • [B] : Timely Tax Court Petition15-11
        • [B][1] : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid15-12
    • § 15:2.5 : Extent of Tax Court Jurisdiction Over Deficiency Proceedings15-25
      • [A] : Jurisdiction Over Additional Issues15-25
      • [B] : Incidental Refund Jurisdiction15-25
      • [C] : Equitable Recoupment Jurisdiction15-26
    • § 15:2.6 : Jurisdiction Over Non-Deficiency Proceedings15-28
      • [A] : Determination of Innocent Spouse and Joint Return Separate Liability Elections15-29
      • [B] : Review of Final Partnership Administrative Adjustments Under TEFRA15-41
      • [C] : Review of Partnership Administrative Adjustments Where Administrative Adjustment Request Is Not Allowed in Full Under TEFRA15-41
      • [D] : Review of Final Partnership Administrative Adjustments for Large Partnership Under TEFRA15-41
      • [E] : Review of Large Partnership Administrative Adjustments Where Administrative Adjustment Request Is Not Allowed in Full Under TEFRA15-42
      • [F] : Statutory Interest Determinations15-42
      • [G] : Review of Abatement of Interest Denials15-43
      • [H] : Awarding Reasonable Litigation and Administrative Costs15-45
      • [I] : Enforcement of Overpayment Decisions15-46
      • [J] : Modification of Decisions in Section 6166 Estate Tax Cases15-47
      • [K] : Review of Jeopardy Assessments in Ongoing Tax Court Cases15-48
      • [L] : Review of Certain Sales of Seized Property15-48
      • [M] : Collection Due Process Actions for Release of Liens and Levies15-49
      • [N] : Disclosure Actions15-50
      • [O] : Injunction Authority15-50
    • § 15:2.7 : Jurisdiction Over Administrative Determinations by the IRS15-51
      • [A] : Declaratory Judgment Relating to Oversheltered Return15-52
      • [B] : Declaratory Judgment Relating to Qualification of Exempt Organization15-52
      • [C] : Declaratory Judgment Relating to Worker Classification15-52
      • [D] : Declaratory Judgment Relating to Qualification of Retirement Plan15-55
      • [E] : Declaratory Judgment Relating to Gift Valuation15-55
      • [F] : Declaratory Judgment Relating to Government Obligations15-56
      • [G] : Declaratory Judgment Relating to Eligibility of an Estate to Make Installment Payments Under Section 616615-56
      • [H] : Whistleblower Award Actions15-56
    • § 15:2.8 : Special Trial Judge Reports: Ballard v. Commissioner15-57
      • [A] : Background15-57
      • [B] : Special Trial Judge Reports: Post-Ballard v. Commissioner Amendments to Tax Court Rules of Practice15-59
    • § 15:2.9 : Tax Court Rules of Practice and Procedure15-61
  • § 15:3 : Tax Court Litigation15-62
    • § 15:3.1 : In General15-62
  • § 15:4 : Practice Before the Tax Court15-63
  • § 15:5 : Tax Court Versus Other Forums15-64
    • [A] : U.S. District Courts15-62
    • [B] : Federal Court of Appeals15-64
    • [C] : U.S. Court of Federal Claims15-64
    • [D] : U.S. Court of Appeals for the Federal Circuit15-65
    • § 15:5.1 : Factors to Consider15-67
      • [A] : Payment of Deficiency15-67
      • [B] : Trial by Jury15-69
      • [C] : Geography, Precedent, and Timetable15-70
      • [D] : Lower Court and Appellate Considerations15-71
      • [E] : Increased Tax Deficiency15-72
      • [F] : Government Representation15-73
      • [G] : Availability of Discovery15-73
      • [H] : Small Tax Case Procedures15-73
      • [I] : Off-the-Record Telephone Conference Calls and Chamber’s Conferences15-74
    • § 15:5.3 : Res Judicata and Collateral Estoppel15-75
  • § 15:6 : Commencing a Tax Court Case15-82
    • § 15:6.1 : Disclosure Statement15-83
    • § 15:6.2 : Service of Papers15-83
    • § 15:6.3 : Form and Style of Papers15-84
    • § 15:6.4 : Appearance by Counsel15-85
    • § 15:6.5 : Pleadings15-86
      • [A] : General Rules15-86
      • [B] : Form Required15-86
      • [C] : Petition15-87
        • [C][1] : Petition for Innocent Spouse or Separate Liability Election: The “Stand-Alone Proceeding”15-91
        • [C][2] : Petition for Award of Reasonable Administrative Costs15-94
        • [C][3] : Petition for Lien or Levy Action15-97
      • [D] : Commissioner’s Answer15-98
      • [E] : Petitioner’s Reply15-100
      • [F] : Amended and Supplemental Pleadings15-101
    • § 15:6.6 : Motions15-102
  • § 15:7 : Parties15-105
  • § 15:8 : Stipulations, Discovery, and Settlements15-105
    • § 15:8.1 : Stipulations15-105
    • § 15:8.2 : Discovery15-112
      • [A] : Timing of Discovery15-113
      • [B] : Informal Discovery Request15-113
      • [C] : Interrogatories15-114
      • [D] : Requests for Production15-114
      • [E] : Requests for Admission15-115
      • [F] : Evidentiary Depositions15-115
      • [G] : Depositions15-116
        • [G][1] : Depositions Upon Consent of the Parties15-116
        • [G][2] : Depositions Without Consent of the Parties, Including Nonparty Witnesses, Party Witnesses, and Expert Witnesses15-117
        • [G][3] : Deposition of an Expert Witness for Other Than Discovery Purposes15-119
      • [H] : Deposition After Commencement of Trial15-119
      • [I] : Discovery of Experts15-119
        • [I][1] : Interrogatories15-119
        • [I][2] : Deposition15-120
        • [I][3] : Expert Witness Reports15-120
      • [J] : Motion for Protective Order15-121
      • [K] : Motion for Continuance15-122
    • § 15:8.3 : Settlement15-123
      • [A] : Settlements by Appeals15-124
      • [B] : Settlements by Counsel15-126
      • [C] : Tax Court Mediation and Voluntary Binding Arbitration15-127
  • § 15:9 : Trial15-131
    • § 15:9.1 : Place of Trial15-131
    • § 15:9.2 : Evidence15-131
    • § 15:9.3 : Burden of Proof15-133
      • [A] : Burden on the Taxpayer: In General15-133
      • [B] : Burden on the Commissioner: Taxpayer Bill of Rights 315-135
    • § 15:9.4 : Courtroom Procedures15-144
      • [A] : Calendar Call15-144
      • [B] : Trial15-146
  • § 15:10 : Trial Memoranda and Briefs15-149
    • § 15:10.1 : In General15-149
    • § 15:10.2 : Form and Content15-153
  • § 15:11 : Decision of the Court15-154
  • § 15:12 : Proceedings After Trial15-155
  • § 15:13 : Small Tax Cases15-157
  • § 15:14 : Tax Refund Claims and Suits15-160
    • § 15:14.1 : Administrative Processing of a Tax Refund Claim15-161
    • § 15:14.2 : Requirements for a Tax Refund Claim15-162
      • [A] : Timely Claim for Refund15-163
      • [B] : Proper Claim for Refund15-164
    • § 15:14.3 : Formal Claim for Refund15-166
    • § 15:14.4 : Informal Claim for Refund15-183
    • § 15:14.5 : Protective Claim for Refund15-190
    • § 15:14.6 : Affirmative Issue Claim for Refund15-192
    • § 15:14.7 : Special Issues Concerning the Refund Statute of Limitations15-193
      • [A] : Determining a Return’s Filing Date15-194
      • [B] : The Look Back Rule15-203
      • [C] : The IRS Cannot Modify the Refund Statute of Limitations15-205
  • § 15:15 : Tentative Carryback Adjustments15-205
  • § 15:16 : Joint Committee Review15-207
    • § 15:16.1 : Suspending the Statute of Limitations During Period of Disability15-211
      • [A] : Statements Required to Claim Financial Disability15-214
    • § 15:16.2 : Two Types of Refund Suits15-215
    • § 15:16.3 : Jurisdiction for Tax Refund Suits15-217
      • [A] : Full Payment15-217
      • [B] : Payment Versus Deposit15-218
      • [C] : Timely Claim for Refund15-219
      • [D] : Proper Claim for Refund15-219
      • [E] : Timely Refund Suit: Notice of Claim Disallowance15-220
    • § 15:16.4 : Tax Refund Complaint15-221
      • [A] : Form of the Complaint15-222
      • [B] : Request for Jury Trial15-222
      • [C] : Government’s Answer and Counterclaim15-222
      • [D] : Burden of Proof15-222
      • [E] : Judgment and Appeals15-223
  • § 15:17 : Reduction of Refund for Nontax Debt15-223
  • § 15:18 : Refund Proceedings Involving Divisible Taxes and IRS Levies15-224
  • § 15:19 : Waiving Right to Sue the United States15-226
  • § 15:20 : Erroneous Refunds and Credits15-227
Chapter 16: The Collection Process
  • § 16:1 : Authority16-6
    • § 16:1.1 : Taxpayer Bill of Rights16-9
    • § 16:1.2 : Statute of Limitations Generally Not to Be Extended16-11
    • § 16:1.3 : Approval Process for Liens, Levies, and Seizures16-15
  • § 16:2 : Notice and Demand16-16
  • § 16:3 : Disclosure of Collection Activity with Respect to Joint Returns16-18
    • § 16:3.1 : Explanation of Joint and Several Liability16-18
    • § 16:3.2 : Separate Notice to Each Filer16-19
  • § 16:4 : Federal Tax Liens—When Your Client Cannot Pay in Full16-19
    • § 16:4.1 : Notice and Hearing Requirement—Taxpayer Bill of Rights 3 and Collection Due Process16-23
      • [A] : Notice16-23
      • [B] : Timely Written Request Requirement for Appeals Office Hearing16-25
      • [C] : One Hearing Only Rule16-28
      • [D] : Prohibition of “Prior Involvement”16-30
      • [E] : Conduct of the Hearing16-30
      • [F] : Verification by Appeals Officer and Issues Taxpayer May Raise (Including Spousal Defenses)16-35
      • [G] : Determination by Appeals Officer16-38
      • [H] : Notice of Determination16-39
      • [I] : Subsequent Judicial Review16-40
      • [J] : Retained Jurisdiction by Appeals and Changed Circumstances of the Taxpayer16-43
      • [K] : Statute of Limitations Suspended16-44
      • [L] : Enforcement Action During Suspension of Statute of Limitations16-45
      • [M] : Hearings Combined16-46
      • [N] : Equivalent Hearing16-46
      • [O] : Effective Date16-49
  • § 16:5 : Period of Tax Lien16-49
  • § 16:6 : Property to Which the Federal Tax Lien Attaches16-50
    • § 16:6.1 : Real Property16-50
    • § 16:6.2 : Personal Property16-50
    • § 16:6.3 : Forms of Ownership16-51
      • [A] : Individual16-51
      • [B] : Joint Tenancy16-51
      • [C] : Tenants in Common16-52
      • [D] : Tenancy by the Entirety16-53
      • [E] : Community Property16-54
      • [F] : Trusts16-55
      • [G] : Partnerships and Joint Ventures16-57
      • [H] : Terminable Interests16-60
      • [I] : Property in the Custody of a Court16-60
      • [J] : Property Held By Third Parties16-60
  • § 16:7 : Filing Notice of Tax Lien and Priority of Liens16-63
    • § 16:7.1 : Place of Filing Notice of Tax Lien16-64
    • § 16:7.2 : Priority of the Federal Tax Lien16-65
      • [A] : Priority Before the Federal Tax Lien Arises16-66
      • [B] : Priority After the Federal Tax Lien Arises but Before an NFTL Is Filed16-69
      • [C] : Priority After the Federal Tax Lien Arises and After an NFTL Is Filed: THE SUPERPRIORITIES16-74
    • § 16:7.3 : Securities16-74
    • § 16:7.4 : Motor Vehicles16-75
    • § 16:7.5 : Personal Property Purchased at Retail16-75
    • § 16:7.6 : Personal Property Purchased in Casual Sale16-76
    • § 16:7.7 : Personal Property Subject to Possessory Lien16-76
    • § 16:7.8 : Real Property Tax and Special Assessment Lien16-76
    • § 16:7.9 : Residential Property Subject to a Mechanic’s Lien (Certain Repairs and Improvements)16-77
    • § 16:7.10 : Attorneys’ Liens16-77
    • § 16:7.11 : Certain Insurance Contracts16-78
    • § 16:7.12 : Passbook Loans16-78
    • § 16:7.13 : Purchase Money Security Interests16-79
    • § 16:7.14 : Commercial Transaction Financing Agreements16-79
    • § 16:7.15 : Real Property Construction or Improvement Financing Agreement16-81
    • § 16:7.16 : Obligatory Disbursement Agreement16-82
    • § 16:7.17 : Section 6323(d)16-82
    • § 16:7.18 : Withdrawal of Certain Notices16-83
  • § 16:8 : Tax Liens and Bankruptcy16-87
  • § 16:9 : Special Liens for Estate and Gift Taxes16-88
    • § 16:9.1 : Liens for Estate Taxes16-88
    • § 16:9.2 : Liens for Gift Taxes16-88
    • § 16:9.3 : Exceptions to Special Estate Tax Liens16-89
  • § 16:10 : Preventing the IRS from Filing the Notice of Tax Lien or Securing Its Release16-89
    • § 16:10.1 : Release of Lien16-91
    • § 16:10.2 : Liability Satisfied or Unenforceable16-91
    • § 16:10.3 : Bond Accepted16-92
    • § 16:10.4 : Discharge of Property16-92
      • [A] : Property Double the Amount of Liability16-92
      • [B] : Part Payment16-92
      • [C] : Interest of United States Valueless16-92
      • [D] : Substitution of Proceeds of Sale16-93
    • § 16:10.5 : Subordination of Lien16-93
    • § 16:10.6 : Nonattachment of Lien16-93
    • § 16:10.7 : Administrative Appeal of Erroneously Filed Lien16-94
    • § 16:10.8 : Civil Action for Failure to Release Lien16-96
    • § 16:10.9 : Third Parties Provided with Procedure for Release of Erroneously Filed Lien16-98
  • § 16:11 : Levy and Distraint16-101
    • § 16:11.1 : Continuous Levies and the Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform Act of 199816-102
    • § 16:11.2 : Release of Levy16-104
      • [A] : Return of Property—Statutory Scheme16-106
      • [B] : Return of Property—Regulatory Scheme16-106
        • [B][1] : In General16-106
        • [B][2] : Return of Levied upon Property in Possession of IRS Pending Sale Under Section 633516-107
        • [B][3] : Conditions Authorizing Return of Property16-107
        • [B][4] : Best Interests of the United States and the Taxpayer to Release Levy and Return of Property Where Levy Made in Violation of Law16-109
        • [B][5] : Time of Return16-110
        • [B][6] : Purchase by the United States16-110
        • [B][7] : Determinations by the Commissioner16-110
        • [B][8] : Procedures for Request for the Return of Property16-111
        • [B][9] : No Interest16-111
        • [B][10] : Administrative Collection upon Default16-111
        • [B][11] : Effective Date16-112
    • § 16:11.3 : Prerequisites for a Valid Levy—Taxpayer Bill of Rights 116-112
    • § 16:11.4 : Prerequisites for a Valid Levy—Taxpayer Bill of Rights 3 and Collection Due Process (and Related Matters)16-114
      • [A] : Notice16-115
      • [B] : Timely Written Request Requirement for Appeals Office Hearing16-117
      • [C] : One Hearing Only Rule16-120
      • [D] : Prohibition of “Prior Involvement”16-122
      • [E] : Conduct of the Hearing16-124
        • [E][1] : In General16-124
        • [E][2] : Face-to-Face Meetings—Former Regulations16-124
        • [E][3] : Face-to-Face Meetings—Present Regulations16-131
        • [E][4] : Miscellaneous Matters16-134
      • [F] : Verification by Appeals Officer and Issues Taxpayer May Raise (Including Spousal Defenses)16-135
      • [G] : Determination by Appeals Officer16-146
      • [H] : Notice of Determination16-147
      • [I] : Subsequent Judicial Review16-148
      • [J] : Retained Jurisdiction by Appeals and Changed Circumstances of Taxpayer16-169
      • [K] : Statute of Limitations Suspended16-171
      • [L] : Enforcement Action During Suspension of Statute of Limitations16-171
      • [M] : Hearings Combined16-173
      • [N] : Equivalent Hearing16-173
      • [O] : Jeopardy, State Tax Refund, and Disqualified Employment Tax Levy Exceptions16-177
      • [P] : Offers in Compromise and Installment Agreements16-179
      • [Q] : Administrative Procedures Codified16-180
      • [R] : Frivolous Requests for Hearing16-180
      • [S] : Effective Date16-180
  • § 16:12 : Property Exempt from Levy16-182
    • § 16:12.1 : Wearing Apparel and School Books16-182
    • § 16:12.2 : Fuel, Provisions, Furniture, and Personal Effects16-182
    • § 16:12.3 : Books and Tools of the Trade16-183
    • § 16:12.4 : Unemployment Benefits16-183
    • § 16:12.5 : Undelivered Mail16-184
    • § 16:12.6 : Certain Annuities and Pension Payments16-184
    • § 16:12.7 : Workers’ Compensation16-184
    • § 16:12.8 : Judgments for Support of Minor Children16-184
    • § 16:12.9 : Minimum Exemptions for Wages, Salary, and Other Income16-185
    • § 16:12.10 : Certain Service Connected Disability Payments16-186
    • § 16:12.11 : Additional Property Exempt from Levy16-186
  • § 16:13 : Continuous Levies Authorized16-190
    • § 16:13.1 : Federal Payment Levy Program16-191
  • § 16:14 : Sale of Seized Property16-192
    • § 16:14.1 : IRS Record-Keeping Rules16-195
  • § 16:15 : Civil Suits by the Government16-196
    • § 16:15.1 : Taxpayer and Third-Party Suits to Restrain Collection16-197
  • § 16:16 : Solutions to Collection Problems—Installment Agreements, Offers in Compromise, and Taxpayer Assistance Orders16-200
    • § 16:16.1 : Installment Agreements16-201
      • [A] : Introduction16-201
      • [B] : Typical Forms16-201
      • [C] : General Considerations16-201
      • [D] : Taxpayer Bill of Rights 1 and 2—Installment Agreements Authorized and Appeals Office Review Available16-204
      • [E] : Installment Agreements as a Right—Taxpayer Bill of Rights 3 (“Guaranteed Installment Agreements”)16-205
      • [F] : Streamlined Installment Agreements16-206
      • [G] : Collection Information Statements and Necessary Expenses for “Regular” Installment Agreements—National Standards, Local Standards, and Other Various Expenses16-207
      • [H] : Full Payment in Five Years Rule16-213
      • [I] : Eliminating Excessive Expenses Within One Year16-213
      • [J] : Business Taxpayers16-214
      • [K] : Appeal Rights16-215
      • [L] : Installment Agreement User Fees16-216
      • [M] : Failure to Pay Penalty Cut in Half16-216
      • [N] : Annual Statements to Taxpayers16-216
      • [O] : Levy Restrictions16-217
      • [P] : Partial Installment Agreements16-221
      • [Q] : Online Payment Agreement Application16-221
      • [R] : Multi-Functional Installment Agreements16-223
      • [S] : Federal and State Installment Agreements16-224
    • § 16:16.2 : Offers in Compromise16-225
      • [A] : In General16-227
      • [B] : Grounds for Compromise16-227
      • [C] : Special Rules for Evaluating Offers to Compromise16-230
      • [D] : Procedures for Submission and Consideration of Offers16-235
      • [E] : Acceptance of Offer to Compromise Tax Liability16-237
      • [F] : Rejection of Offer to Compromise and Appeals16-239
      • [G] : Effect of Offer to Compromise on Collection Activity16-240
      • [H] : Deposits16-242
      • [I] : Statute of Limitations16-242
      • [J] : Inspection16-242
      • [K] : Effective Date16-243
      • [L] : Fixed Monthly Payment Option and Relief from Accrued Interest16-243
      • [M] : Default16-244
      • [N] : User Fees16-244
      • [O] : Partial Payment Requirement, User Fees, Miscellaneous Rules, and Frivolous Submissions16-246
    • § 16:16.3 : Taxpayer Assistance Orders16-247
  • § 16:17 : Payment of Tax by Commercially Acceptable Means16-249
  • § 16:18 : Civil Damages for Certain Unauthorized Collection Actions16-249
    • § 16:18.1 : Third Parties May Recover Damages for Unauthorized Collection Actions16-254
  • § 16:19 : Fair Tax Collection Practices Imposed on IRS16-255
  • § 16:20 : Checks to Be Paid to the U.S. Treasury16-257
  • § 16:21 : Practitioner Priority Service (PPS) for Tax Professionals16-257
    • § 16:21.1 : PPS—In General16-257
    • § 16:21.2 : Types of Assistance Offered by PPS16-258
    • § 16:21.3 : Hints for Improving PPS Experience16-259
    • § 16:21.4 : Tips for Calling PPS16-259
    • § 16:21.5 : What Practitioners Should Have on Hand When Calling PPS on an Automated Collection System Account (ACS)16-261
    • § 16:21.6 : What Practitioners Should Expect When Calling PPS for an ACS Account16-262
  • § 16:22 : E-Services for Tax Practitioners16-263
    • § 16:22.1 : Disclosure Authorization16-263
    • § 16:22.2 : Electronic Account Resolution16-263
    • § 16:22.3 : Transcript Delivery System16-263
    • § 16:22.4 : Income Verification Express Service (IVES) Program16-264
Chapter 17: Recovering Attorney Fees: Section 7430 of the Code and Related Matters
  • § 17:1 : Introduction17-2
  • § 17:2 : In General17-3
  • § 17:3 : Exhaustion of Administrative Remedies17-5
    • § 17:3.1 : Requirements17-5
    • § 17:3.2 : Revocation of Tax Exempt Status17-10
    • § 17:3.3 : Actions Involving Summonses, Levies, Liens, Jeopardy, and Termination Assessments17-12
    • § 17:3.4 : Exception to Requirement to Exhaust Administrative Remedies17-13
    • § 17:3.5 : Examples17-14
  • § 17:4 : Only Costs Allocable to the United States17-18
  • § 17:5 : Pre-Taxpayer Bill of Rights 2: Exclusion of Declaratory Judgment Proceedings17-18
  • § 17:6 : Costs Denied Where Prevailing Party Protracts Proceedings17-18
    • § 17:6.1 : Administrative Proceeding Defined17-19
  • § 17:7 : Reasonable Litigation and Administrative Costs Defined17-20
    • § 17:7.1 : Reasonable Litigation Costs17-20
    • § 17:7.2 : Hourly Cap: “Special Factor” and “Limited Availability”17-24
      • [A] : Taxpayer Bill of Rights 3: Expansion of the “Special Factor”17-33
      • [B] : Taxpayer Bill of Rights 3: Attorney Fees Recoverable When Pro Bono Services Rendered17-34
    • § 17:7.3 : Reasonable Administrative Costs17-34
  • § 17:8 : “Prevailing Party” Defined: Pre-Taxpayer Bill of Rights 2: Burden on the Taxpayer17-35
    • § 17:8.1 : Substantially Justified17-35
  • § 17:9 : “Prevailing Party” Defined: Taxpayer Bill of Rights 2 and 3 and the “Qualified Offer”17-36
    • § 17:9.1 : Final Regulations and the Qualified Offer Rule17-38
      • [A] : In General17-38
      • [B] : Requirements for Treatment As a Prevailing Party Based upon Having Made a Qualified Offer17-39
        • [B][1] : In General17-39
        • [B][2] : Liability Under the Last Qualified Offer17-41
        • [B][3] : Liability Pursuant to the Judgment17-41
      • [C] : Qualified Offer Defined17-42
        • [C][1] : In General17-42
        • [C][2] : To the United States17-43
        • [C][3] : Specifies the Offered Amount17-44
        • [C][4] : Designated at the Time It Is Made As a Qualified Offer17-45
        • [C][5] : Remains Open17-47
        • [C][6] : Last Qualified Offer17-47
        • [C][7] : Qualified Offer Period17-47
      • [D] : Examples17-48
      • [E] : Effective Date17-56
    • § 17:9.2 : Substantially Justified: Burden of Proof Shifts to the IRS17-56
      • [A] : Is the Internal Revenue Manual “Published Guidance”?17-65
    • § 17:9.3 : When the IRS Has Lost in Other Circuits: Taxpayer Bill of Rights 317-68
  • § 17:10 : Manner of Determining Who Is the Prevailing Party17-69
  • § 17:11 : “Position of the United States” Defined17-70
  • § 17:12 : Multiple Actions17-71
  • § 17:13 : Right of Appeal17-72
  • § 17:14 : Timing17-72
  • § 17:15 : Net Worth Requirements17-73
  • § 17:16 : Section 6673 and Rule 1117-75
  • § 17:17 : Reporting of Certain Payments17-77
  Table of Authorities
  Index

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