TreatiseTreatise

Internal Revenue Service: Practice and Procedure Deskbook (5th Edition)

 by Erin M Collins, Edward M Robbins, Jr.
 
 Copyright: 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402429859
  • Page Count: 2296
  • Number of Volumes: 3
  •  

“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: Organization of the IRS
  • § 1:1 : Function and Authority of the Internal Revenue Service1-3
  • § 1:2 : Former IRS Organization1-5
  • § 1:3 : 1998 Reorganization1-6
  • § Chart 1-1 : IRS Organization Chart: May 20171-10
  • § § 1:4 : IRS Oversight Board1-11
  • § § 1:5 : Department of Treasury and the Commissioner of Internal Revenue1-12
  • § § 1:6 : IRS National Office1-13
  • § § 1:7 : Chief Counsel1-13
  • § § 1:8 : Appeals1-14
  • § § 1:9 : Taxpayer Advocate Service (TAS)1-14
    • § § 1:9.1 : TAS Overview1-16
    • § § 1:9.2 : Using the Taxpayer Advocate Program and Taxpayer Assistance Orders (TAOs)1-20
    • § § 1:9.3 : TAS Organizational Structure1-22
      • [A] : TAS Casework Function1-22
      • [B] : TAS Systemic Analysis and Advocacy1-23
    • § § 1:9.4 : Treasury Inspector General for Tax Administration1-24
      • [A] : TIGTA’s Audit Program1-25
      • [B] : The Investigative Program1-25
      • [C] : The Investigative Process1-27
      • [D] : Chief Counsel to the Inspector General1-27
      • [E] : Mission Support1-28
      • [F] : IRS Employee Assistance Is Important to TIGTA1-28
      • [G] : IRS Employee Termination1-28
  • § § 1:10 : Examination: Four Operating Divisions1-30
    • § § 1:10.1 : Wage and Investment (W&I) Operating Division1-30
      • [A] : Taxpayer Characteristics1-30
      • [B] : Organizational Structure1-30
        • [B][1] : Communications, Assistance, Research and Education (CARE)1-31
          • [B][1][a] : Media and Publications1-31
          • [B][1][b] : Stakeholder, Partnership, Education, and Communication1-31
          • [B][1][c] : Field Assistance Operations Overview1-32
        • [B][2] : Customer Account Services (CAS)1-32
          • [B][2][a] : Submission Processing1-32
          • [B][2][b] : Accounts Management (AM)1-33
          • [B][2][c] : Joint Operations Center (JOC)1-33
        • [B][3] : Compliance1-33
    • § § 1:10.2 : Small Business/Self-Employed Operating Division1-34
      • [A] : Taxpayer Characteristics1-34
        • [A][1] : Overview1-34
        • [A][2] : Small Businesses1-35
        • [A][3] : Self-Employed and Supplemental Income Earners1-35
        • [A][4] : Other SB/SE Taxpayers1-36
      • [B] : Organizational Structure1-36
        • [B][1] : Communications and Stakeholder Outreach (CSO)1-37
          • [B][1][a] : Taxpayer Assistance Centers (TAC)1-38
        • [B][2] : Customer Account Services Organization (CAS)1-39
          • [B][2][a] : Submission Processing1-39
          • [B][2][b] : Accounts Management (AM)1-39
        • [B][3] : Compliance Organization1-40
      • [C] : Stakeholder Relationship Management (SRM)1-41
        • [C][1] : Issue Management Resolution Systems1-41
    • § § 1:10.3 : Large Business & International (LB&I)1-42
      • [A] : Taxpayer Characteristics1-42
      • [B] : Organizational Structure1-42
        • [B][1] : The “Future State”1-43
        • [B][2] : Nine Practice and Compliance Areas1-43
    • § § 1:10.4 : Tax Exempt and Government Entities (TE/GE) Operating Division1-44
      • [A] : Taxpayer Characteristics1-44
      • [B] : TE/GE Organizational Structure1-45
      • [C] : Employee Plans (EP) Organization1-46
      • [D] : Exempt Organizations (EO)1-46
      • [E] : Government Entities (GE) Organization1-46
        • [E][1] : Tax Exempt Bonds1-46
        • [E][2] : Federal, State, and Local Governments (FSLG)1-47
        • [E][3] : Indian Tribal Governments1-47
      • [F] : Process-Based Organizational Segments1-47
        • [F][1] : TE/GE Customer Education and Outreach (CE&O)1-48
        • [F][2] : TE/GE Rulings and Agreements1-48
        • [F][3] : TE/GE Examinations1-48
        • [F][4] : TE/GE CAS1-49
  • § § 1:11 : Office of Chief Counsel1-49
    • § § 1:11.1 : Organizational Structure1-50
      • [A] : Associate Chief Counsel Offices1-50
      • [B] : Division Counsel and Field Counsel1-50
      • [C] : Chief Counsel Directives Manual1-51
  • § § 1:12 : Department of Justice, Tax Division1-52
  • § § 1:13 : Appeals1-53
    • § § 1:13.1 : Organizational Structure1-54
      • [A] : Appeals Operating Division Structure1-54
  • § § 1:14 : Joint Committee on Taxation (JCT)1-57
  • § § 1:15 : Office of Professional Responsibility (OPR)1-58
  • § § 1:16 : CI1-58
  • § § 1:17 : Place for Filing Notices1-59
  • § § 1:18 : IRS Fax Guidelines1-60
    • § § 1:18.1 : General Guidelines1-60
    • § § 1:18.2 : Specific Guidance on Use of Faxes in Tax Administration Processes1-61
  • § § 1:19 : Freedom of Information Act (FOIA) Public Liaisons1-63
  • § § 1:20 : IRS VITA Grant Program1-63
  • § § 1:21 : IRS Whistleblower Office1-64
  • § § 1:22 : E-Services for Tax Professionals1-64
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) Exceptions2-11
    • § 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 Restrictions2-15
    • § 2:4.1 : Duty to Cooperate2-16
    • § 2:4.2 : Knowledge of Client Error or Omission2-17
    • § 2:4.3 : Duty to Disclose Adverse Authority2-18
  • § 2:5 : Office of Professional Responsibility2-22
    • § 2:5.1 : OPR Investigations2-25
    • § 2:5.2 : Alternative Disciplinary Approaches2-27
    • § 2:5.3 : Processing Investigations2-29
    • § 2:5.4 : Sanctions and Other Disciplinary Measures2-32
    • § 2:5.5 : Statute of Limitations for Circular 230 Disciplinary Actions2-34
  • § 2:6 : Best Practices for Tax Advisors2-36
  • § 2:7 : Competency2-37
  • § 2:8 : Standards for Tax Returns and Documents, Affidavits, and Other Papers2-37
  • § 2:9 : Written Advice2-39
  • § 2:10 : Historical Perspective: Original (1994 Edition) Standards for Tax-Shelter Opinion Letters2-41
    • § 2:10.1 : Definition of Terms2-42
    • § 2:10.2 : Tax-Shelter Opinion Requirements2-45
      • [A] : Factual Matters2-45
      • [B] : Relating Law to Facts2-47
      • [C] : Identifying Material Issues2-47
      • [D] : Opinions on Each Material Issue2-47
      • [E] : Overall Evaluation2-48
      • [F] : Description of Opinions2-50
      • [G] : Partial Opinions and Reliance on Other Opinions2-50
  • § 2:11 : Historical Perspective: Revised Standards for Tax-Shelter Opinion Letters and Related Matters (May 2005 Until June 2014)2-51
    • § 2:11.1 : Requirements for Covered Opinions2-53
  • § Chart 2-1 : Circular 230 Written Advice Flowchart2-54
    • [A] : Covered Opinion Defined2-55
    • [B] : Excluded Advice Defined2-55
    • [C] : Federal Tax Issue Defined2-59
    • [D] : Reliance Opinion Defined2-59
    • [E] : Marketed Opinion Defined2-59
    • [F] : Conditions of Confidentiality Defined2-60
    • [G] : Contractual Protection Defined2-60
    • [H] : Prominent Disclosure Defined2-61
    • [I] : State or Local Bond Opinion Defined2-61
    • [J] : Principal Purpose2-62
    • [K] : Requirements for Covered Opinions2-63
    • [L] : Competence to Provide Opinion and Reliance on Opinion of Others2-67
    • [M] : Required Disclosures2-67
    • [N] : Effect of Opinion That Meets Former Section 10.35 Standards2-69
    • [O] : Effective Date2-69
    • § § 2:11.2 : Procedures to Ensure Compliance with Covered Opinions2-69
      • [A] : Failure to Comply with the Requirements for Covered Opinions2-69
      • [B] : Effective Date2-70
  • § § 2:12 : Establishment of Advisory Committees2-70
    • § § 2:12.1 : Advisory Committees2-70
    • § § 2:12.2 : Effective Date2-71
  • § § 2:13 : Disreputable Conduct2-71
  • § § 2:14 : Violation of Regulations2-72
  • § § 2:15 : Tax-Shelter Opinion Letters and Attorney-Client Privilege2-73
    • § § 2:15.1 : Introduction2-73
    • § § 2:15.2 : Statutory Change2-75
Chapter 3: Types of Authority in Federal Tax Practice; and Appendix 3A
  • § 3:1 : Types of Authority in Federal Tax Practice3-2
  • § 3:2 : Statutory/Legislative Authority3-3
    • § 3:2.1 : The Code and Legislative History3-3
    • § 3:2.2 : Legislative History and the Blue Book3-3
    • § 3:2.3 : Tax Treaties3-4
  • § 3:3 : Administrative Authority3-6
    • § 3:3.1 : Regulations3-6
      • [A] : Final Regulations3-7
        • [A][1] : Prospective and Retroactive Regulations3-11
      • [B] : Proposed Regulations3-12
      • [C] : Temporary Regulations3-13
      • [D] : Procedural Regulations3-13
      • [E] : Finding Regulations3-15
    • § 3:3.2 : IRS Rulings3-16
      • [A] : Letter Rulings3-16
        • [A][1] : Closing Agreement3-19
        • [A][2] : Determination Letter3-19
        • [A][3] : Information Letter3-19
        • [A][4] : Circumstances Under Which Letter Rulings Are Issued3-19
        • [A][5] : Circumstances Under Which Letter Rulings Are Not Issued3-20
        • [A][6] : Circumstances Under Which Determination Letters Are Not Issued3-21
        • [A][7] : Considerations Involved in Ruling Requests3-22
        • [A][8] : Letter Ruling Conferences3-23
        • [A][9] : Disclosure Pursuant to Section 61103-24
        • [A][10] : 9100 Relief3-25
          • [A][10][a] : Filing Requirements3-28
          • [A][10][b] : Conference of Right3-30
          • [A][10][c] : Judicial Review3-31
      • [B] : Revenue Rulings3-31
      • [C] : Revenue Procedures3-33
      • [D] : Technical Advice Memoranda (TAMs)3-34
      • [E] : Action on Decisions—IRS Acquiescence Program for Court Decisions3-37
      • [F] : Chief Counsel Advice3-38
      • [G] : General Counsel Memoranda (GCMs)3-41
      • [H] : Other Pronouncements3-41
    • § 3:3.3 : Judicial Authority3-42
      • [A] : Tax Court3-42
      • [B] : Decisions of Other Federal Courts3-43
      • [C] : Court of Appeals3-44
      • [D] : U.S. Supreme Court3-45
      • [E] : Judicial Authority3-45
    • § 3:3.4 : Other Secondary Authority3-46
    • § 3:3.5 : Internal Revenue Manual3-47
    • § 3:3.6 : Computerized Research3-47
    • § 3:3.7 : Free Databases and Websites3-48
  • Appendix 3A : Free WebsitesApp. 3A-1
Chapter 4: Tax Returns and Interest
  • § 4:1 : Background4-4
  • § 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 Household4-8
      • [F] : Individual Is Under Eighteen Years of Age4-8
      • [G] : Alien4-9
    • § 4:2.2 : C Corporation, S Corporation and Consolidated Groups4-10
    • § 4:2.3 : Partnerships4-14
    • § 4:2.4 : Limited Liability Partnership4-17
    • § 4:2.5 : Limited Liability Company4-17
    • § 4:2.6 : Trusts and Estates4-18
    • § 4:2.7 : Exempt Organizations/Political Organizations/Homeowners’ Associations4-19
    • § 4:2.8 : Information Returns and Payee Statements4-19
      • [A] : Bank and Financial Accounts (FBAR)4-20
      • [B] : Foreign Account Tax Compliance Act (FATCA)4-21
        • [B][1] : Disclosures Regarding Foreign Assets4-22
        • [B][2] : The End of Foreign Bank Secrecy for U.S. Account Holders4-24
    • § 4:2.9 : IRS Substituted Returns4-26
    • § 4:2.10 : Amended Returns4-27
    • § 4:2.11 : Net Operating Loss4-31
  • § 4:3 : When to File Tax Returns4-32
    • § 4:3.1 : Extension of Time for Filing Returns4-32
    • § 4:3.2 : Filing Dates4-33
      • [A] : Individual Tax Return4-33
      • [B] : Resident Aliens and U.S. Citizens Living Abroad4-33
      • [C] : Corporation4-33
      • [D] : Partnership4-34
      • [E] : Trusts and Estates4-35
      • [F] : Exempt Organizations/Political Organizations/Homeowners’ Associations4-35
      • [G] : Filing Date Falls on Saturday, Sunday, or Legal Holiday4-38
      • [H] : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid4-39
      • [I] : Superseded Returns Filed Prior to Expiration of Extended Due Date4-41
      • [J] : Superseded Return—Impact on Statute of Limitations4-42
      • [K] : Qualified Amended Return4-43
      • [L] : Extensions of Time to File Tax Return4-44
        • [L][1] : Individuals4-44
          • [L][1][a] : Additional Extension4-46
        • [L][2] : Corporations4-46
        • [L][3] : Partnerships4-48
        • [L][4] : Estates and Trusts4-48
        • [L][5] : Information Returns4-48
  • § 4:4 : How to File Tax Returns4-49
    • § 4:4.1 : Electronic Filing4-49
    • § 4:4.2 : Certified or Registered Mail4-51
    • § 4:4.3 : Use of Private Meter Machines4-52
    • § 4:4.4 : Designated Private Delivery Service4-52
    • § 4:4.5 : Hand Delivery4-54
    • § 4:4.6 : What Constitutes a Valid Tax Return4-55
  • § 4:5 : Who Must Sign the Return4-58
    • § 4:5.1 : Individuals4-58
    • § 4:5.2 : Joint Return4-59
    • § 4:5.3 : Minor4-59
    • § 4:5.4 : Deceased Taxpayer4-59
    • § 4:5.5 : Corporation4-60
    • § 4:5.6 : Partnership4-60
    • § 4:5.7 : Power of Attorney4-63
  • § 4:6 : Common Errors When Preparing Individual Tax Returns4-63
  • § 4:7 : Interest on Underpayments and Overpayments of Tax4-65
    • § 4:7.1 : Background4-65
    • § 4:7.2 : Basic Interest Calculation4-69
      • [A] : Step One: Amount of Tax Underpayment or Overpayment4-69
      • [B] : Step Two: Date Interest Begins Accruing on Underpayment or Overpayment4-69
      • [C] : Step Three: Date Interest Stops Accruing on Underpayment or Overpayment4-71
      • [D] : Step Four: Applicable Interest Rates4-73
    • § 4:7.3 : Restrictions and Adjustments to the General Rules4-75
      • [A] : Large Corporate Underpayments (LCU)—“Hot Interest”4-75
      • [B] : Large Corporate Overpayments—GATT Interest4-76
      • [C] : Net Operating Loss Carrybacks4-76
      • [D] : Foreign Tax Credit Carrybacks4-77
      • [E] : Refunds Within Forty-five Days After Return Is Filed4-78
      • [F] : Interest Netting and Overpayment Interest Resulting from Transfer of Credits4-79
        • [F][1] : Background4-79
        • [F][2] : Current Law4-80
        • [F][3] : When Does Global Interest Netting Apply?4-82
        • [F][4] : How to Request Interest Netting4-82
        • [F][5] : Statute of Limitations for Filing Form 8434-83
        • [F][6] : Case Law4-85
      • [G] : Applicability to Assessable Penalties, Additional Amount, and Additions to Tax4-89
      • [H] : Overpayment of Estimated Quarterly Tax Payments4-89
      • [I] : Statutory Deposit Procedures—Cash Bond Versus Payment of Tax4-90
      • [J] : Notice and Demand Grace Period4-91
      • [K] : Waiver of the Restrictions on Assessment and Collection4-91
      • [L] : Abatement of Interest Attributable to Unreasonable Service Error4-92
      • [M] : Suspension of Interest When the IRS Fails to Contact an Individual Taxpayer4-93
      • [N] : Combat Zone4-94
      • [O] : Presidentially Declared Disaster4-95
      • [P] : Impact of a Termination and Jeopardy Assessments4-95
      • [Q] : Seized Property4-95
      • [R] : Interest on Estate Tax Returns4-95
      • [S] : Restricted Interest4-96
    • § 4:7.4 : Administrative Procedures—Claims for Refunds4-97
    • § 4:7.5 : Litigating Interest Issues4-98
      • [A] : Tax Court4-98
      • [B] : District Court or Court of Federal Claims4-99
        • [B][1] : Suits for Refunds of Interest on Underpayments4-99
        • [B][2] : Suits for Statutory Interest on Overpayments4-99
        • [B][3] : Interest Offsets4-100
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 Request5-11
    • § 5:3.2 : Where to Send a FOIA Request5-15
    • § 5:3.3 : Timing of the IRS Response to a FOIA Request5-16
    • § 5:3.4 : FOIA Exemptions5-18
      • [A] : Section 552(b)(1) Exemption: Classified Documents Pertaining to National Defense and Foreign Policy5-19
      • [B] : Section 552(b)(2) Exemption: Internal Personnel Rules and Practices5-19
      • [C] : Section 552(b)(3) Exemption: Information Exempt Under Other Laws5-22
      • [D] : Section 552(b)(4) Exemption: Trade Secrets and Confidential Commercial or Financial Information5-23
      • [E] : Section 552(b)(5) Exemption: Inter-Agency or Intra-Agency Memorandums or Letters5-24
      • [F] : Section 552(b)(6) Exemption: Personal Privacy5-28
      • [G] : Section 552(b)(7) Exemption: Law Enforcement5-29
      • [H] : Section 552(b)(8) Exemption: Financial Institutions5-34
      • [I] : Section 552(b)(9) Exemption: Geological Information5-34
    • § 5:3.5 : FOIA Exclusions5-34
      • [A] : Exclusion 15-34
      • [B] : Exclusion 25-35
      • [C] : Exclusion 35-35
    • § 5:3.6 : Administrative Appeal Procedures5-35
    • § 5:3.7 : Judicial Action5-37
    • § 5:3.8 : FOIA Practice Tip5-38
Chapter 6: The Examination Function
  • § 6:1 : What Is an IRS Audit?6-3
  • § 6:2 : How Returns Are Selected for Examination6-3
  • § Table 6-1 : Total Amount of IRS Audits on Individual Tax Returns?6-7
  • § Table 6-2 : IRS Audit Rates by Income Level for Individuals (2008 and 2009 Versus 2015 and 2016)6-8
  • § Table 6-3 : IRS Audit Rates/Statistics by Tax Filing Type (2011 Versus 2016)6-9
  • § § 6:3 : Types of IRS Audits6-10
    • § § 6:3.1 : Computer Scoring: Discriminant Inventory Function (DIF) System Audits and Unreported Income Discriminant Index Formula (UIDIF) Audits6-12
    • § § 6:3.2 : Campus Reporting Compliance Programs6-13
      • [A] : Correspondence and Submission Processing Center Examinations6-13
      • [B] : Automated Underreporter (AUR) Program (Formerly Information Reporting Program (IRP) Audits)6-15
        • [B][1] : In General6-15
        • [B][2] : Soft Notice Program6-17
      • [C] : Mathematical Errors6-17
    • § § 6:3.3 : Taxpayer Compliance Measurement Program (TCMP) Audits and the National Research Program (NRP)6-20
    • § § 6:3.4 : Project Audits6-22
    • § § 6:3.5 : Large Case Examinations6-25
    • § § 6:3.6 : Partnership Audits Under the Tax Equity and Fiscal Responsibility Act of 1982 and the Taxpayer Relief Act of 19976-25
    • § § 6:3.7 : Executive Branch Audit Influence Barred6-26
  • § § 6:4 : Office and Field Audits6-28
    • § § 6:4.1 : Office Examinations6-28
    • § § 6:4.2 : Field Examinations6-29
  • § § 6:5 : Chronology of an IRS Audit6-30
    • § § 6:5.1 : Practical Aspects of an IRS Audit6-35
      • [A] : IRS’s Authority to Examine Books and Records6-35
      • [B] : IRS Methods of Obtaining Information6-36
        • [B][1] : Information Document Request (IDR)6-36
        • [B][2] : Third-Party Contacts6-38
        • [B][3] : Formal Document Request (FDR)6-38
        • [B][4] : Tour of Taxpayer Business6-39
        • [B][5] : Accountants’ Work Papers6-40
  • § § 6:6 : How to Handle an IRS Audit6-41
    • § § 6:6.1 : Introduction6-41
    • § § 6:6.2 : Interview and Techniques6-47
    • § § 6:6.3 : Notice of Proposed Adjustment6-48
    • § § 6:6.4 : Agent’s Settlement Authority6-48
    • § § 6:6.5 : Do’s and Don’ts6-49
    • § § 6:6.6 : Audit Conclusions6-51
      • [A] : No Change6-51
      • [B] : Agreed Case6-52
      • [C] : Unagreed Case6-52
      • [D] : Partially Agreed Case6-53
  • § § 6:7 : Fast Track Dispute Resolution Program: Fast Track Mediation or Fast Track Settlement: Alternative to Traditional Appeals6-53
  • § § 6:8 : Thirty-Day Letter6-57
    • § § 6:8.1 : Strategic Considerations6-59
  • § § 6:9 : Extending the Statute of Limitations (and Taxpayer Bill of Rights 3)6-62
  • § § 6:10 : Statutory Notice of Deficiency6-69
  • § § 6:11 : Early Termination of Audits: Repetitive Audit Procedures6-70
  • § § 6:12 : Reopening of Case by Taxpayer Other Than by Filing Formal Claim: Audit Reconsiderations6-71
  • § § 6:13 : Abatement of Interest for IRS Errors and Delays, and Penalties for Erroneous IRS Advice6-74
  • § § 6:14 : Reopening of Closed Audit by IRS6-75
  • § § 6:15 : Rescission of the Ninety-Day Letter6-76
  • § § 6:16 : Abatement of Interest: Taxpayer Bill of Rights 26-78
  • § § 6:17 : Attorney-Client Privilege Extended to “Federally Authorized Tax Practitioners”6-81
    • § § 6:17.1 : Background6-81
    • § § 6:17.2 : Law6-83
    • § § 6:17.3 : Questions and Concerns6-88
    • § § 6:17.4 : Attorney-Client Privilege and Section 75256-91
      • [A] : All Communications Between an Attorney or Practitioner and the Client Are Not Privileged Communications6-91
      • [B] : The Privilege Does Not Apply to Communications with Third Parties6-92
      • [C] : The Privilege Does Not Apply to the Preparation of Tax Returns6-93
      • [D] : A Confidential Document Does Not Remain Privileged Regardless of Distribution6-94
        • [D][1] : Voluntary Disclosure6-94
        • [D][2] : Inadvertent Disclosure6-97
      • [E] : Giving Preexisting Documents to an Attorney or Practitioner Does Not Qualify Them for the Privilege6-98
      • [F] : The Tax Practitioner Privilege Is Not Unlimited6-98
Chapter 7: Large Case Examinations
  • § 7:1 : What Is a Large Case Audit?7-4
  • § 7:2 : LB&I Reorganization, Again: “Future State”7-5
    • § 7:2.1 : IRS Rules of Engagement7-6
    • § 7:2.2 : New Organizational Structure7-7
    • § 7:2.3 : Nine Practice Areas7-8
  • § Chart 7-1 : LB&I Organizational Chart7-10
    • § § 7:2.4 : Goals of the Future State Reorganization7-11
    • § § 7:2.5 : Campaigns7-12
      • [A] : January 31, 2017 Campaigns Announced7-12
    • § § 7:2.6 : Issue-Based Examinations and Issue-Driven Risk Analysis7-16
    • § 7:2.7 : Pre-“Future State”: LB&I’s Previous Reorganizations7-17
  • § 7:3 : Under the Future State, Who Will Be My Team?7-17
    • § 7:3.1 : Case Manager Roles and Responsibilities7-18
    • § 7:3.2 : Issue Manager Roles and Responsibilities7-18
    • § § 7:3.3 : Managers of Team Members Who Are Not Designated As the Case Manager or Issue Manager7-19
    • § § 7:3.4 : Team Coordinator Roles and Responsibilities7-19
    • § § 7:3.5 : Issue Team Member Roles and Responsibilities7-20
  • § § 7:4 : LB&I Examination7-20
    • § § 7:4.1 : Phase One: Planning a LB&I Examination7-21
      • [A] : IRS Preliminary Examination Work and Risk Analysis7-22
      • [B] : Planning File7-24
      • [C] : Examination Plan7-25
        • [C][1] : LB&I Examination Process (LEP)7-27
      • [D] : Opening Conference with Taxpayer7-29
    • § § 7:4.2 : Phase Two: Execution Phase7-30
      • [A] : Acknowledgment on the Facts7-31
      • [B] : Resolution Phase7-32
  • § § 7:5 : Taxpayer Preparation for Large Case Examinations7-32
    • § § 7:5.1 : Opening Conference7-35
    • § § 7:5.2 : Other Factors to Consider for an LB&I Examination7-36
      • [A] : Regular Communications with the Team Manager (aka Case Manager) or Issue Manager7-36
      • [B] : Communications with Other IRS Audit Personnel7-37
      • [C] : Communications with and Access to Taxpayer’s Employees7-37
      • [D] : Location/Retrieval of Records7-39
        • [D][1] : Memorandum of Understanding Agreement to Use Secure Email7-40
      • [E] : IRS Requests for Documents, Information and Summonses7-41
        • [E][1] : LB&I Information Document Request Process: The Carrot and the Stick7-41
        • [E][2] : IDR Process: The Carrot7-42
        • [E][3] : Key Points of a Proper IDR7-42
        • [E][4] : IDR Enforcement Process: The Stick7-43
        • [E][5] : Key Points: IDR Enforcement Process7-43
      • [F] : Affirmative Issue7-47
      • [G] : Issue Resolution/Notices of Proposed Adjustments (NOPAs)7-48
      • [H] : Involvement of IRS Counsel, Specialists, and Technical Advisors7-50
      • [I] : Preliminary Strategies for Resolution7-51
      • [J] : Accounting Method Issues7-51
      • [K] : Impact on Future Years7-52
      • [L] : Estimated Completion Date7-53
      • [M] : Statute of Limitations7-53
      • [N] : Taxpayer’s Risk Analysis7-54
      • [O] : Agreements Reached During Prior Audits7-54
      • [P] : Rollover Settlements7-55
      • [Q] : IRS Accommodations7-55
      • [R] : Security and Disclosure Concerns7-56
      • [S] : Power of Attorney7-56
      • [T] : Audit Location7-57
      • [U] : Requests for Tax Returns of Corporate Officials—Compliance Check7-57
      • [V] : Be Familiar with Possible Alternative Dispute Resolutions Techniques7-59
      • [W] : Designating a Case for Litigation7-59
      • [X] : Be Familiar with Publication 5125, Large Business and International Examination Process7-60
      • [Y] : Closing Conferences7-60
      • [Z] : Resolution/Settlement Considerations7-61
  • § § 7:6 : Appeals for LB&I Taxpayers7-63
    • § § 7:6.1 : Appeals Jurisdiction in Docketed Cases7-63
    • § § 7:6.2 : Pre-Conference Appeals Meeting7-64
    • § § 7:6.3 : Opening Conference7-66
    • § § 7:6.4 : Opening Conference: Appeals Procedure Changes7-68
    • § § 7:6.5 : Appeals Case Memorandums (ACMs)7-69
    • § § 7:6.6 : Post-Settlement Conference7-70
  • § § 7:7 : Joint Committee on Taxation (JCT)7-71
    • § § 7:7.1 : Background7-71
    • § § 7:7.2 : Joint Committee Criteria7-73
    • § § 7:7.3 : Cases Not Required to Be Reportable to the JCT7-76
    • § § 7:7.4 : Assessment Statute of Limitations and JCT7-78
    • § § 7:7.5 : JCT Pending in Appeals7-79
    • § § 7:7.6 : JCT Review7-80
    • § § 7:7.7 : Claims Rejected by Joint Committee7-80
  • § § 7:8 : Implication of State Tax Filings Resulting in Federal Adjustments7-81
  • § § 7:9 : Rapid Appeals Process (RAP)7-83
  • § § 7:10 : Compliance Assurance Program (CAP)7-84
    • § § 7:10.1 : Three Phases of CAP7-85
      • [A] : Phase One: Pre-CAP7-85
      • [B] : Phase Two: CAP7-86
      • [C] : Phase Three: CAP Compliance Maintenance7-86
    • § § 7:10.2 : Description of the CAP Program7-87
    • § § 7:10.3 : Aspects of the Program7-88
    • § § 7:10.4 : Memorandum of Understanding7-89
    • § § 7:10.5 : Assignment of Account Coordinator7-89
    • § § 7:10.6 : Post-Filing Review7-90
    • § § 7:10.7 : Key Considerations7-91
  • § § 7:11 : Prior LB&I Coordinated Issues (ISP, Tiered Issues, IPG & IPN)7-91
  • § § 7:12 : Alternative Dispute Resolutions (ADRs)7-94
    • § § 7:12.1 : Pre-Filing Agreement Program7-94
      • [A] : Exclusions7-96
      • [B] : PFA Statistics7-97
    • § § 7:12.2 : Delegation Order 4-247-97
    • § § 7:12.3 : Delegation Order 4-257-100
    • § § 7:12.4 : Early Referral Program7-100
    • § § 7:12.5 : Accelerated Issue Resolution (AIR)7-101
    • § § 7:12.6 : Revenue Procedure 94-69: Qualified Amended Return7-103
    • § § 7:12.7 : Superseded Returns Filed Prior to Expiration of Extended Due Date7-106
    • § § 7:12.8 : Limited Issue-Focused Examination (LIFE)7-108
    • § § 7:12.9 : Fast-Track Dispute Resolution Program: Fast-Track Settlement7-109
      • [A] : Overview7-109
      • [B] : FTS Procedures7-109
    • § § 7:12.10 : Post-Appeals Mediation7-112
    • § § 7:12.11 : Appeals Arbitration7-115
    • § § 7:12.12 : Comprehensive Case Resolution (CCR)7-116
      • [A] : Industry Issue Resolution Program7-117
        • [A][1] : Business Tax Issues Appropriate for IIR7-117
        • [A][2] : Business Tax Issues Not Appropriate for IIR7-118
        • [A][3] : How to Submit an IIR for Consideration7-118
        • [A][4] : How the IIR Process Works7-118
        • [A][5] : IIR Guidance Issued7-119
    • § § 7:12.13 : Advanced Pricing Agreements (APA)7-126
      • [A] : The APA Process: Pre-Filing Conference7-128
      • [B] : The APA Process: APA Submission7-131
      • [C] : APA User Fees7-132
      • [D] : The APA Process: APA Annual Report7-133
    • § § 7:12.14 : APAs: Rollback of Transfer Pricing Method7-133
    • § § 7:12.15 : Advance Pricing and Mutual Agreement Program7-134
    • § § 7:12.16 : Competent Authority Process (CAP)7-134
  • § § 7:13 : Policy of Restraint—Tax Accrual Workpapers (TAW)7-138
    • § § 7:13.1 : Overview7-138
      • [A] : Summary of Relevant Cases7-144
    • § § 7:13.2 : Uncertain Tax Position: Schedule UTP7-151
      • [A] : Schedule UTP Filing Statistics7-152
  • § Table 7-1 : Schedule UTP TY2014 Filing Statistics (as of March 2016)7-152
    • [B] : UTPs a Historical Background: Announcements 2010-9, 2010-17, 2010-30, 2010-75, and 2010-767-154
  • § Chart 7-2 : General Rules for Assessment and Refund Statutes for Income and Franchise Taxes7-162
Chapter 8: Claims for Refund and Refund Suits
  • § 8:1 : Tax Refund Claims and Suits8-2
    • § 8:1.1 : Administrative Processing of a Tax Refund Claim8-3
    • § 8:1.2 : Requirements for a Tax Refund Claim8-4
      • [A] : Timely Claim for Refund8-5
      • [B] : Proper Claim for Refund8-7
  • § Table 8-1 : Refund Claims General Rules8-9
    • § § 8:1.3 : Formal Claim for Refund8-19
    • § § 8:1.4 : Informal Claim for Refund8-36
    • § § 8:1.5 : Protective Claim for Refund8-43
    • § § 8:1.6 : Affirmative Issue Claim for Refund8-45
    • § § 8:1.7 : Special Issues Concerning the Refund Statute of Limitations8-46
      • [A] : Determining a Return’s Filing Date8-47
      • [B] : The Look-Back Rule8-56
      • [C] : The IRS Cannot Modify the Refund Statute of Limitations8-58
  • § § 8:2 : Tentative Carryback Adjustments8-58
  • § § 8:3 : Carryover of Net Operating Losses or Credits8-60
  • § § 8:4 : Joint Committee Review8-67
  • § § 8:5 : Suspending the Statute of Limitations During Period of Disability8-70
    • § § 8:5.1 : Statements Required to Claim Financial Disability8-74
  • § § 8:6 : Refund Litigation8-75
    • § § 8:6.1 : Two Types of Refund Suits8-76
    • § § 8:6.2 : Jurisdiction for Tax Refund Suits8-78
      • [A] : Full Payment8-78
      • [B] : Payment Versus Deposit8-80
      • [C] : Timely Claim for Refund8-81
      • [D] : Proper Claim for Refund8-81
      • [E] : Timely Refund Suit: Notice of Claim Disallowance8-81
    • § § 8:6.3 : Tax Refund Complaint8-82
      • [A] : Form of the Complaint8-83
      • [B] : Request for Jury Trial8-83
      • [C] : Government’s Answer and Counterclaim8-83
      • [D] : Burden of Proof8-83
      • [E] : Judgment and Appeals8-84
  • § § 8:7 : Reduction of Refund for Nontax Debt8-84
  • § § 8:8 : Refund Proceedings Involving Divisible Taxes and IRS Levies8-86
  • § § 8:9 : Waiving Right to Sue the United States8-88
  • § § 8:10 : Erroneous Refunds and Credits8-88
Chapter 9: Administrative Appeal
  • § 9:1 : Introduction9-3
    • § 9:1.1 : Organization of the Appeals Office9-5
  • § 9:2 : 2014 Appeals Policy: Appeals Judicial Attitude and Culture for Non-Docketed Cases9-8
  • § 9:3 : When Can Taxpayers File an Appeal?9-9
  • § 9:4 : Must the Service Grant an Appeal?9-10
    • § 9:4.1 : No Immediate Tax Consequence Cases9-11
  • § 9:5 : How to Appeal9-11
    • § 9:5.1 : Procedural Requirements9-11
    • § 9:5.2 : Written Protest9-13
    • § 9:5.3 : Rebuttal to Taxpayer Protest9-16
    • § 9:5.4 : Appeals’ Representation9-19
    • § 9:5.5 : Appeals Conference9-19
      • [A] : Opening Conference9-21
      • [B] : Examination and Counsel Participation in Nondocketed Settlement Conferences9-23
      • [C] : Appeals Conferences—Face-to-Face Conference9-24
  • § 9:6 : Ex Parte Communications Prohibited9-28
    • § 9:6.1 : General Definition of “Ex Parte”9-29
    • § 9:6.2 : Types of Communications Prohibited9-29
    • § 9:6.3 : Types of Communications Not Prohibited9-30
    • § 9:6.4 : Administrative File Not a Communication9-31
    • § 9:6.5 : Preliminary Review Considerations9-31
    • § 9:6.6 : New Issues Raised by Taxpayer9-33
    • § 9:6.7 : Ongoing Communications with Originating Function9-34
    • § 9:6.8 : New Facts or Evidence9-34
    • § 9:6.9 : Communications with Counsel9-35
    • § 9:6.10 : Joint Committee Communications9-36
    • § 9:6.11 : Taxpayer Advocate Service9-36
    • § 9:6.12 : Outside Experts9-36
    • § 9:6.13 : “Opportunity to Participate”9-37
    • § 9:6.14 : Waiver9-38
    • § 9:6.15 : Pre-Settlement and Post-Settlement Conferences9-38
    • § 9:6.16 : Compliance and Taxpayer Remedies9-39
  • § 9:7 : Negotiations, Settlement Practices, and the Hazards of Litigation9-46
    • § 9:7.1 : Hazards of Litigation9-46
      • [A] : Taxpayer-Adverse Guidance9-49
    • § 9:7.2 : Controlling Law: Golsen Rule9-51
    • § 9:7.3 : Settlements in General9-52
    • § 9:7.4 : Mutual Concession Settlements9-53
    • § 9:7.5 : Split-Issue Settlements9-54
    • § 9:7.6 : Nuisance Value Settlements9-54
    • § 9:7.7 : Qualified Settlement Offer9-55
    • § 9:7.8 : Technical Advice9-56
    • § 9:7.9 : Appeals Case Memorandums9-57
    • § 9:7.10 : Docketed Cases—Appeals Jurisdiction9-57
    • § 9:7.11 : New Issues9-59
    • § 9:7.12 : Whipsaw Issues9-61
    • § 9:7.13 : Penalties9-61
    • § 9:7.14 : Settlements That Affect Later Taxable Years9-62
    • § 9:7.15 : Agreement Forms9-62
      • [A] : Forms 870 and 870-AD9-62
        • [A][1] : Form 870-AD and Equitable Estoppel9-64
        • [A][2] : Duty of Consistency9-66
      • [B] : Closing Agreements9-66
      • [C] : Settlement Agreements in Docketed Tax Court Cases9-70
      • [D] : Collateral Agreements Distinguished9-70
  • § 9:8 : Joint Committee Cases9-71
  • § 9:9 : Alternative Dispute Resolution9-72
    • § 9:9.1 : Post-Appeals Mediation9-73
      • [A] : Confidentiality and Ex Parte9-76
      • [B] : Appeals Procedures Apply9-76
      • [C] : Practical Observations9-77
  • § 9:10 : Coordinated and Appeals Emerging Issues9-79
    • § 9:10.1 : Compliance Coordinated Issues9-79
    • § 9:10.2 : Appeals Coordinated Issue9-79
    • § 9:10.3 : Appeals Informal Coordinated Issue9-80
    • § 9:10.4 : Appeals Emerging Issue9-81
  • § 9:11 : Unagreed Non-Docketed Case: Issues Not Resolved in Appeals9-81
  • § 9:12 : Collection Due Process Hearing9-82
    • § 9:12.1 : Requesting a CDP Hearing9-82
    • § 9:12.2 : Suspension of Collections9-82
    • § 9:12.3 : CDP Hearing9-83
    • § 9:12.4 : Form 9423, Collection Appeal Request9-84
    • § 9:12.5 : Judicial Review of CDP Determination9-87
  • § 9:13 : Rapid Response Appeals Process9-90
  • § 9:14 : Can the Taxpayer Record a Collection Due Process Hearing with Appeals?9-91
    • § 9:14.1 : Legal Basis and Background for Recording9-92
    • § 9:14.2 : IRS Interpretation of the Law and Former Policy9-92
    • § 9:14.3 : Court’s View9-93
    • § 9:14.4 : IRS Position9-93
Chapter 10: Tax Court Litigation
  • § 10:1 : Introduction10-4
  • § 10:2 : Organization of Tax Court10-5
    • § 10:2.1 : In General10-5
    • § 10:2.2 : Matters Allowed to the Special Trial Judges10-6
    • § 10:2.3 : Jurisdiction Overview10-7
    • § 10:2.4 : Jurisdiction Over Deficiency Proceedings10-7
      • [A] : Valid Statutory Notice of Deficiency10-8
        • [A][1] : Existence of a Deficiency10-8
        • [A][2] : Deficiency Tax10-9
        • [A][3] : The Last Known Address Issue10-9
        • [A][4] : The Scar Issue10-10
        • [A][5] : Motion to Dismiss for Lack of Jurisdiction10-11
      • [B] : Timely Tax Court Petition10-12
        • [B][1] : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid10-12
    • § 10:2.5 : Extent of Tax Court Jurisdiction Over Deficiency Proceedings10-24
      • [A] : Jurisdiction Over Additional Issues10-24
      • [B] : Incidental Refund Jurisdiction10-24
      • [C] : Equitable Recoupment Jurisdiction and More10-25
    • § 10:2.6 : Jurisdiction Over Non-Deficiency Proceedings10-28
      • [A] : Determination of Innocent Spouse and Joint Return Separate Liability Elections10-29
      • [B] : Review of Final Partnership Administrative Adjustments Under TEFRA10-40
        • [B][1] : Bipartisan Budget Act of 201510-40
      • [C] : Review of Partnership Administrative Adjustments Where Administrative Adjustment Request Is Not Allowed in Full Under TEFRA10-41
      • [D] : Review of Final Partnership Administrative Adjustments for Large Partnership Under TEFRA10-41
      • [E] : Review of Large Partnership Administrative Adjustments Where Administrative Adjustment Request Is Not Allowed in Full Under TEFRA10-41
      • [F] : Statutory Interest Determinations10-42
      • [G] : Review of Abatement of Interest Denials10-43
      • [H] : Awarding Reasonable Litigation and Administrative Costs10-45
      • [I] : Enforcement of Overpayment Decisions10-45
      • [J] : Modification of Decisions in Section 6166 Estate Tax Cases10-47
      • [K] : Review of Jeopardy Assessments in Ongoing Tax Court Cases10-48
      • [L] : Review of Certain Sales of Seized Property10-48
      • [M] : Collection Due Process Actions for Release of Liens and Levies10-49
      • [N] : Disclosure Actions10-50
      • [O] : Injunction Authority10-50
    • § 10:2.7 : Jurisdiction Over Administrative Determinations by the IRS10-51
      • [A] : Declaratory Judgment Relating to Oversheltered Return10-51
      • [B] : Declaratory Judgment Relating to Qualification of Exempt Organization10-52
      • [C] : Declaratory Judgment Relating to Worker Classification10-52
      • [D] : Declaratory Judgment Relating to Qualification of Retirement Plan10-55
      • [E] : Declaratory Judgment Relating to Gift Valuation10-55
      • [F] : Declaratory Judgment Relating to Government Obligations10-55
      • [G] : Declaratory Judgment Relating to Eligibility of an Estate to Make Installment Payments Under Section 616610-56
      • [H] : Whistleblower Award Actions10-56
    • § 10:2.8 : Special Trial Judge Reports: Ballard v. Commissioner10-57
      • [A] : Background10-57
      • [B] : Special Trial Judge Reports: Post-Ballard v. Commissioner Amendments to Tax Court Rules of Practice10-59
    • § 10:2.9 : Tax Court Rules of Practice and Procedure10-61
  • § 10:3 : Tax Court Litigation10-62
    • § 10:3.1 : In General10-62
  • § 10:4 : Practice Before the Tax Court10-63
  • § 10:5 : Tax Court Versus Other Forums10-63
    • § 10:5.1 : Alternative Forums10-64
      • [A] : U.S. District Courts10-64
      • [B] : Federal Court of Appeals10-65
      • [C] : U.S. Court of Federal Claims10-66
      • [D] : U.S. Court of Appeals for the Federal Circuit10-67
    • § 10:5.2 : Factors to Consider for Choice of Litigation Forum10-67
      • [A] : Payment of Deficiency10-67
      • [B] : Trial by Jury10-68
      • [C] : Geography, Legal Precedent, and Timetable10-69
      • [D] : Lower Court and Appellate Considerations10-71
      • [E] : Increased Tax Deficiency10-72
      • [F] : Government Representation10-72
      • [G] : Availability of Discovery10-73
      • [H] : Small Tax Case Procedures10-73
      • [I] : Off-the-Record Telephone Conference Calls and Chamber’s Conferences10-73
    • § 10:5.3 : Res Judicata and Collateral Estoppel10-75
  • § 10:6 : Commencing a Tax Court Case10-82
    • § 10:6.1 : Disclosure Statement10-82
    • § 10:6.2 : Service of Papers10-82
    • § 10:6.3 : Form and Style of Papers10-83
    • § 10:6.4 : Appearance by Counsel10-85
    • § 10:6.5 : Pleadings10-85
      • [A] : General Rules10-85
      • [B] : Form Required10-86
      • [C] : Petition10-87
        • [C][1] : Petition for Innocent Spouse or Separate Liability Election: The “Stand-Alone Proceeding”10-90
        • [C][2] : Petition for Award of Reasonable Administrative Costs10-94
        • [C][3] : Petition for Lien or Levy Action10-96
      • [D] : Commissioner’s Answer10-97
      • [E] : Petitioner’s Reply10-99
      • [F] : Amended and Supplemental Pleadings10-100
    • § 10:6.6 : Motions10-101
  • § 10:7 : Parties10-104
  • § 10:8 : Stipulations, Discovery, and Settlements10-104
    • § 10:8.1 : Stipulations10-104
    • § 10:8.2 : Discovery10-111
      • [A] : Timing of Discovery10-112
      • [B] : Informal Discovery Request10-112
      • [C] : Interrogatories10-113
      • [D] : Requests for Production10-114
      • [E] : Requests for Admission10-114
      • [F] : Evidentiary Depositions10-114
      • [G] : Depositions10-115
        • [G][1] : Depositions upon Consent of the Parties10-115
        • [G][2] : Depositions Without Consent of the Parties, Including Nonparty Witnesses, Party Witnesses, and Expert Witnesses10-117
        • [G][3] : Deposition of an Expert Witness for Other Than Discovery Purposes10-118
      • [H] : Deposition After Commencement of Trial10-118
      • [I] : Discovery of Experts10-118
        • [I][1] : Interrogatories10-119
        • [I][2] : Deposition10-119
        • [I][3] : Expert Witness Reports10-120
      • [J] : Motion for Protective Order10-120
      • [K] : Motion for Continuance10-121
    • § 10:8.3 : Settlement10-122
      • [A] : Settlements by Appeals10-123
      • [B] : Settlements by Counsel10-125
      • [C] : Tax Court Mediation and Voluntary Binding Arbitration10-126
  • § 10:9 : Trial10-130
    • § 10:9.1 : Place of Trial10-130
    • § 10:9.2 : Evidence10-130
    • § 10:9.3 : Burden of Proof10-131
      • [A] : Burden on the Taxpayer: In General10-131
      • [B] : Burden on the Commissioner: Taxpayer Bill of Rights 310-132
    • § 10:9.4 : Courtroom Procedures10-141
      • [A] : Calendar Call10-141
      • [B] : Trial10-143
  • § 10:10 : Trial Memoranda and Briefs10-146
    • § 10:10.1 : In General10-146
    • § 10:10.2 : Form and Content10-149
  • § 10:11 : Decision of the Court10-150
  • § 10:12 : Proceedings After Trial10-151
  • § 10:13 : Small Tax Cases10-154
Chapter 11: Statute of Limitations/Assessments/Summary Assessments
  • § 11:1 : Overview of Assessments11-3
    • § 11:1.1 : What Is an “Assessment”?11-4
    • § 11:1.2 : What Is the Filing Date of a Return?11-6
      • [A] : Early Return11-6
      • [B] : Return of Certain Employment Taxes11-7
      • [C] : Return Executed by Secretary11-7
      • [D] : Return of Excise Taxes11-8
    • § 11:1.3 : Mailbox Rule—Timely-Mailed, Timely-Filed, Timely-Paid11-8
  • § 11:2 : Statute of Limitations—Assessments11-11
    • § 11:2.1 : False Return11-12
    • § 11:2.2 : Willful Attempt to Evade Tax11-12
    • § 11:2.3 : No Return11-13
    • § 11:2.4 : Extension by Agreement11-13
    • § 11:2.5 : Tax Resulting from Changes in Certain Income Tax, Gift Tax or Estate Tax Credits11-14
    • § 11:2.6 : Termination of Private Foundation Status11-15
    • § 11:2.7 : Special Rule for Certain Amended Returns11-15
    • § 11:2.8 : Failure to Notify Secretary of Certain Foreign Transfers11-15
    • § 11:2.9 : Gift Tax on Certain Gifts Not Shown on Return11-15
    • § 11:2.10 : Listed Transactions11-16
    • § 11:2.11 : Section 6501(c)(8)11-16
    • § 11:2.12 : Amended Returns11-20
    • § 11:2.13 : Filing Date Falls on Saturday, Sunday, or Legal Holiday11-21
    • § 11:2.14 : Superseding Returns Filed Prior to Expiration of Extended Due Date11-22
    • § 11:2.15 : Request for Prompt Assessment11-23
    • § 11:2.16 : Substantial Omission of Gross Income11-24
      • [A] : Information with Respect to Foreign Financial Assets11-30
    • § 11:2.17 : Personal Holding Company Tax11-31
    • § 11:2.18 : Incorrect Return Filed11-32
    • § 11:2.19 : Net Operating Loss or Capital Loss Carrybacks11-33
      • [A] : IRS’s Ability to Adjust Attributes in Closed Years for NOL Determinations11-35
      • [B] : Taxpayer’s Ability to Make Adjustments to Items in Closed Years for NOL Determinations11-36
    • § 11:2.20 : Foreign Tax Carrybacks11-39
    • § 11:2.21 : Credit Carrybacks11-39
    • § 11:2.22 : Tentative Carryback Adjustment Assessment Period11-40
    • § 11:2.23 : Pass-Through Entities (S Corporations, Partnerships, Trusts)11-41
  • § 11:3 : Collection After Assessment11-42
  • § 11:4 : Suspension of Assessment Statute11-42
    • § 11:4.1 : Issuance of Notice of Deficiency11-43
    • § 11:4.2 : Assets in Court Control or Custody11-44
    • § 11:4.3 : Taxpayer Outside United States11-45
    • § 11:4.4 : Extensions of Time for Payment of Estate Tax11-45
    • § 11:4.5 : Extensions of Time for Payment of Tax Attributable to Recoveries of Foreign Expropriation Losses11-45
    • § 11:4.6 : Wrongful Seizure11-45
    • § 11:4.7 : Wrongful Lien11-46
    • § 11:4.8 : Suspension Pending Correction11-46
    • § 11:4.9 : Cases Under Title 11 United States Code (Bankruptcy and Receiverships)11-46
    • § 11:4.10 : Extension of Time for Payment of Undistributed PFIC Earnings Tax Liability11-47
    • § 11:4.11 : Designated Summonses11-47
    • § 11:4.12 : Third-Party Summonses11-49
  • § 11:5 : Mitigation of the Statute of Limitations11-50
    • § 11:5.1 : Introduction11-50
    • § 11:5.2 : Purpose of the Mitigation Provisions11-51
    • § 11:5.3 : General Requirements11-52
      • [A] : Determination11-53
      • [B] : Some Bar to Adjustment11-54
      • [C] : Inconsistent Position11-55
        • [C][1] : What Meets the “Inconsistent Position” Requirement?11-56
        • [C][2] : Active Versus Passive “Inconsistent Position”11-58
        • [C][3] : Inconsistent Position Not Required11-59
    • § 11:5.4 : Existence of a Relationship11-60
    • § 11:5.5 : Circumstances of Adjustment11-61
    • § 11:5.6 : Problem Areas Under Section 1312 Circumstances of Adjustment11-63
    • § 11:5.7 : Method, Manner, and Procedure of Adjustment11-64
  • § 11:6 : Summary Assessments—Jeopardy and Termination Assessments11-65
    • § 11:6.1 : Jeopardy Levy Cases Outside Section 7429—Nature of Problem11-65
    • § 11:6.2 : Termination Assessments Defined11-67
    • § 11:6.3 : Jeopardy Assessments Defined11-69
    • § 11:6.4 : Presumption Where Owner of Large Amount of Cash Is Not Identified11-70
    • § 11:6.5 : Problem of Departing Aliens11-71
    • § 11:6.6 : Issuance of Notice of Deficiency11-73
    • § 11:6.7 : Amount Assessable11-74
    • § 11:6.8 : Taxpayer Remedies for Jeopardy and Termination Assessments11-75
      • [A] : Overview11-75
      • [B] : Posting Bond to Stay Collection11-75
      • [C] : Statutory Framework11-76
        • [C][1] : Administrative Review11-77
        • [C][2] : Judicial Review11-79
        • [C][3] : Finality of Court Determination11-81
        • [C][4] : Burden of Proof—In General11-82
        • [C][5] : Burden of Proof—Section 749111-88
        • [C][6] : Stay of Sale of Seized Property11-89
    • § 11:6.9 : Other Types of Immediate Assessment11-90
    • § 11:6.10 : Jeopardy Levy Procedures11-90
    • § 11:6.11 : Jeopardy Levy Cases Outside Section 742911-92
    • § 11:6.12 : Statute of Limitations for Refunds11-95
Chapter 12: TEFRA and the BBA
  • § 12:1 : Overview of TEFRA12-5
    • § 12:1.1 : Prior Law12-5
    • § 12:1.2 : Theory of TEFRA12-6
    • § 12:1.3 : Significant Danger in TEFRA for Taxpayers12-7
    • § 12:1.4 : TEFRA/Non-TEFRA Determination12-7
    • § 12:1.5 : Some Key Differences Between TEFRA and Non-TEFRA Procedures12-11
    • § 12:1.6 : Special Enforcement Areas12-13
  • § 12:2 : New Terminology Under TEFRA12-13
    • § 12:2.1 : Tax Matters Partner (TMP)12-13
    • § 12:2.2 : Partner12-14
    • § 12:2.3 : Notice and Non-Notice Partner12-14
    • § 12:2.4 : Pass-Thru Partner12-14
    • § 12:2.5 : Indirect Partner12-15
    • § 12:2.6 : Investor12-15
    • § 12:2.7 : Notice Group and 5% Group12-15
    • § 12:2.8 : Partnership Item12-15
    • § 12:2.9 : Non-Partnership Item12-15
    • § 12:2.10 : Affected Item12-15
    • § 12:2.11 : Notice of Beginning of Administrative Proceeding (NBAP)12-16
    • § 12:2.12 : Sixty-Day Letter12-16
    • § 12:2.13 : Final Partnership Administrative Adjustment (FPAA)12-16
    • § 12:2.14 : Request for Administrative Adjustment (AAR)12-17
    • § 12:2.15 : Computational Adjustment12-17
    • § 12:2.16 : Inconsistent Treatment12-17
    • § 12:2.17 : Settlement Agreement12-18
    • § 12:2.18 : Consistent Treatment12-18
    • § 12:2.19 : Affected Items Statutory Notice of Deficiency12-18
    • § 12:2.20 : Foreign Partnerships12-18
  • § 12:3 : Tax Matters Partner (TMP)12-19
    • § 12:3.1 : Designation of the TMP12-19
    • § 12:3.2 : Authority and Responsibilities of the TMP12-21
      • [A] : Generally12-21
      • [B] : Treasury Regulation Section 301.6223(g)-112-23
      • [C] : TMP’s Responsibilities Under the Tax Court Rules12-23
        • [C][1] : Rule 241(f)(1)12-23
        • [C][2] : Rule 241(g)12-23
        • [C][3] : Rule 248(b)(3)12-23
        • [C][4] : Rule 248(c)(2)12-24
    • § 12:3.3 : Authority of Persons Other Than the TMP12-24
  • § 12:4 : Partnership Items/Non-Partnership Items/Affected Items12-27
    • § 12:4.1 : Partnership Items12-29
    • § 12:4.2 : Computational and Substantive Affected Items12-32
      • [A] : Outside Basis12-34
      • [B] : At-Risk12-35
      • [C] : Passive Losses12-36
      • [D] : Cancellation of Indebtedness (COD)12-36
    • § 12:4.3 : Non-Partnership Items12-36
      • [A] : Conversion12-37
      • [B] : Special Enforcement Areas12-38
      • [C] : Election to Treat Partnership Items As Non-Partnership Items12-40
      • [D] : Penalties12-41
  • § 12:5 : Examination of a TEFRA Partnership Return12-43
    • § 12:5.1 : Administrative Steps in an Audit of a TEFRA Return12-44
    • § 12:5.2 : Examination12-45
    • § 12:5.3 : TEFRA Appeals12-46
    • § 12:5.4 : Affected TEFRA Court Actions12-47
      • [A] : Court Filings by Tax Matters Partner Pursuant to Section 6226(a)12-48
      • [B] : Filing by Notice Partner or Representative of 5% Group Pursuant to Section 6226(b)12-48
      • [C] : Priority of Actions12-48
  • § 12:6 : TEFRA Settlement Procedures12-49
    • § 12:6.1 : Consistent Treatment12-51
      • [A] : In General12-51
      • [B] : Limitations on Requests for Consistent Treatment12-51
    • § 12:6.2 : Effect of Settlement12-53
      • [A] : General Rule of Conversion12-53
      • [B] : Nonapplicability of Section 6601(c)12-54
      • [C] : Partial Versus Complete Settlements12-54
    • § 12:6.3 : Docketed Tax Court Case Settlement Procedure12-55
  • § 12:7 : TEFRA Statute of Limitations on Assessment12-57
  • § 12:8 : TEFRA Assessments12-60
    • § 12:8.1 : Restriction on Assessment and Collection of Tax—General Rule12-60
    • § 12:8.2 : Exceptions to the General Rule12-60
    • § 12:8.3 : Assessment of Affected Items12-61
    • § 12:8.4 : Period of Limitations for Making Assessments of Affected Items12-61
    • § 12:8.5 : Computational Adjustments (Assessments)12-62
    • § 12:8.6 : Procedures to Challenge a Computational Adjustment12-62
  • § 12:9 : Administrative Adjustment Request Sections 6227 and 622812-64
    • § 12:9.1 : Introduction12-64
    • § 12:9.2 : Section 622712-65
      • [A] : Limits on Filing AARs12-65
      • [B] : TMP Filed AARs on Behalf of the Entire Partnership12-65
      • [C] : Partner Filed AARs Not on Behalf of Entire Partnership12-66
      • [D] : Time Limit for Making Refunds or Credits Under Section 622712-66
    • § 12:9.3 : Section 622812-66
      • [A] : Judicial Review of AARs on Behalf of Partnership12-66
      • [B] : Coordination of TMP Petitions Under Section 6228(a) and FPAAs for the Same Year12-67
      • [C] : Parties to Action, Scope of Judicial Review, and Review of Court Determination12-68
      • [D] : Judicial Review of AARs on Behalf of the Partner and Not the Partnership12-68
  • § 12:10 : Electing Large Partnerships12-69
    • § 12:10.1 : Definition of an Electing Large Partnership12-69
    • § 12:10.2 : Election Required to Be Treated As an ELP12-70
    • § 12:10.3 : Exclusions from ELP12-70
    • § 12:10.4 : Simplified Flow-Through to the Partners12-70
    • § 12:10.5 : Treatment of Partnership Items and Adjustments12-70
    • § 12:10.6 : Computing Imputed Underpayment12-71
    • § 12:10.7 : Partnership May Be Liable for Imputed Underpayment12-72
    • § 12:10.8 : Partnership Liable for Interest and Penalties12-72
    • § 12:10.9 : Partnership-Level Adjustments12-72
    • § 12:10.10 : Requests for Administrative Adjustment12-73
    • § 12:10.11 : Partner with Authority12-73
  • § 12:11 : New Partnership Audit Procedures: Bipartisan Budget Act of 201512-73
    • § 12:11.1 : Revised Partnership Audits and Adjustments Rules12-74
    • § 12:11.2 : Reason for the Regime Change12-76
    • § 12:11.3 : Partnerships Impacted by the Changes12-78
    • § 12:11.4 : To Opt Out or Not to Opt Out of the New Regime: Things to Consider12-79
    • § 12:11.5 : Now What: Creative Adjustment and Collection Mechanisms12-82
      • [A] : Amount of Imputed Underpayment12-82
      • [B] : Payment of Imputed Underpayment by Partnership12-84
      • [C] : Alternative Mechanism for Payment by Partners: The Push Out12-84
    • § 12:11.6 : Administrative Adjustment Request (AAR)12-85
    • § 12:11.7 : Partnership “Sole” Representative12-86
    • § 12:11.8 : Statute of Limitations12-88
    • § 12:11.9 : Affected BBA Court Actions12-89
    • § 12:11.10 : Effective Date and Elections into the BBA in an Eligible Tax Year12-89
    • § 12:11.11 : Amendment to Section 704(e) and Section 76112-91
Chapter 13: Third-Party Liability
  • § 13:1 : Introduction: Transferee and Fiduciary Liability13-4
  • § 13:2 : Who Is the Transferee?13-4
  • § 13:3 : How Does Transferee Liability Arise?13-4
    • § 13:3.1 : At Law13-4
    • § 13:3.2 : In Equity13-8
  • § 13:4 : Extent of Liability of Transferee13-9
  • § 13:5 : Special Problem of Life Insurance Proceeds13-10
  • § 13:6 : Fiduciary Liability13-11
  • § 13:7 : IRS Procedures13-12
    • § 13:7.1 : Transferee Liability Cases13-12
    • § 13:7.2 : Fiduciary Liability Cases13-14
  • § 13:8 : Statute of Limitations13-15
    • § 13:8.1 : Assessment13-15
    • § 13:8.2 : Collection13-16
  • § 13:9 : Bankruptcy13-16
  • § 13:10 : Res Judicata13-17
  • § 13:11 : Introduction: Trust Fund Recovery Penalty for Employment Taxes13-22
  • § 13:12 : Penalty Equal to the Total Amount of Tax Evaded, Not Collected, or Not Accounted For and Paid Over13-25
  • § 13:13 : The Responsible Person13-26
    • § 13:13.1 : Tax-Exempt Organizations Exception: Taxpayer Bill of Rights 213-40
    • § 13:13.2 : Statute of Limitations on Assessment and Collection13-41
  • § 13:14 : Willfulness and Reasonable Cause13-43
  • § 13:15 : Requirement of Corporate Insolvency13-53
  • § 13:16 : Joint and Several Liability13-54
    • § 13:16.1 : Contribution Under the Taxpayer Bill of Rights 213-54
  • § 13:17 : Designation of Payments13-55
  • § 13:18 : Liability of Third Persons13-58
  • § 13:19 : Bankruptcy13-59
  • § 13:20 : Burden of Proof13-60
  • § 13:21 : Adjudicating the Controversy: Administrative and Judicial Remedies (Including Taxpayer Bill of Rights 2 and 3)13-65
  • § 13:22 : Criminal Liability: Employment Tax Enforcement Program13-67
    • § 13:22.1 : Employment Tax Schemes13-68
      • [A] : Pyramiding13-68
      • [B] : Employment Leasing13-68
      • [C] : Paying Employees in Cash13-68
      • [D] : Filing False Payroll Tax Returns or Failing to File Payroll Tax Returns13-68
      • [E] : Frivolous Arguments13-68
      • [F] : Offshore Employee Leasing13-69
      • [G] : Misclassifying Worker Status13-69
      • [H] : S Corporation Officers Compensation Treated As Corporate Distributions13-70
      • [I] : Filing False Payroll Tax Returns or Failing to File Payroll Tax Returns13-70
  • § 13:23 : Questionable Employment Tax Practice (QETP) Initiative Agreements13-70
    • § 13:23.1 : Introduction13-70
    • § 13:23.2 : QETP Definition13-71
    • § 13:23.3 : General Overview of the Program13-71
    • § 13:23.4 : Purpose of the MOU13-71
    • § 13:23.5 : MOU Participants13-72
    • § 13:23.6 : What Will Happen Under the MOU?13-73
    • § 13:23.7 : QETP and Taxpayer Privacy13-73
    • § 13:23.8 : QETP Beyond the MOU13-73
  • § 13:24 : Introduction: Innocent Spouse13-74
    • § 13:24.1 : Innocent Spouse Relief: Taxpayer Relief Act of 199713-75
    • § 13:24.2 : Innocent Spouse and Separate Liability Elections: Taxpayer Bill of Rights 313-76
    • § 13:24.3 : Traditional Innocent Spouse Election13-76
      • [A] : Knowledge13-81
      • [B] : Inequitable13-90
      • [C] : Understatement13-94
      • [D] : Apportionment of Relief13-95
      • [E] : Burden of Proof13-96
    • § 13:24.4 : Separate Liability Election13-97
      • [A] : Burden of Proof13-98
      • [B] : Individuals Eligible to Make Election13-98
      • [C] : Time for Election13-99
      • [D] : Election Not Valid Regarding Certain Deficiencies Involving “Actual Knowledge”13-99
      • [E] : Liability Increased by Reason of Transfers of Property to Avoid Tax13-104
      • [F] : Allocation of Deficiency13-104
    • § 13:24.5 : Tax Court Review13-107
    • § 13:24.6 : Discretionary Equitable Relief: Revenue Procedure 2003-61 (Requests on or After November 1, 2003)13-109
      • [A] : Eligibility for Equitable Relief13-111
      • [B] : Circumstances Under Which the IRS Ordinarily Will Grant Equitable Relief Under Section 6015(f)13-113
      • [C] : Factors for Determining Whether to Grant Equitable Relief13-115
      • [D] : Refunds13-118
      • [E] : Procedure13-118
      • [F] : Effective Date13-119
      • [G] : Burden of Proof: Abuse of Discretion Standard?13-119
    • § 13:24.7 : Equitable Relief: Revenue Procedure 2013-34 (Requests on or After September 16, 2013)13-120
      • [A] : Eligibility for Equitable Relief13-124
      • [B] : Circumstances Under Which the IRS Will Make Streamline Determinations Granting Equitable Relief Under Sections 66(c) and 6015(f)13-127
      • [C] : Factors for Determining Whether to Grant Equitable Relief13-128
      • [D] : Refunds13-136
      • [E] : Procedure13-136
      • [F] : Effective Date13-136
    • § 13:24.8 : Forms: Innocent Spouse Relief and Injured Spouse Claim13-137
    • § 13:24.9 : Common Problems13-138
    • § 13:24.10 : Effect of Innocent Spouse Relief on Other Spouse13-139
    • § 13:24.11 : Types of Relief Requested and Impact on Collection13-140
    • § 13:24.12 : Effect of Prior Closing Agreement or Offer in Compromise13-141
    • § 13:24.13 : Effect of Fraud13-143
    • § 13:24.14 : Scope of Section 601513-144
    • § 13:24.15 : Time and Manner for Requesting Relief13-144
    • § 13:24.16 : Notice to Nonrequesting Spouse13-148
    • § 13:24.17 : Credits, Refunds, and Res Judicata13-151
      • [A] : In General13-151
      • [B] : Res Judicata13-151
      • [C] : Credit and Refund Not Available Under Section 6015(c)13-155
    • § 13:24.18 : Effect of a Previous Chapter 7 Bankruptcy13-155
Chapter 14: Summons Power and Third-Party Contacts
  • § 14:1 : Nature and Scope of the Summons Power14-2
  • § 14:2 : Enforcement of the Summons14-9
    • § 14:2.1 : The Powell Requirements14-14
      • [A] : Legitimate Purpose14-15
        • [A][1] : Sole Criminal Purpose14-15
        • [A][2] : Dual Purpose Summonses14-20
      • [B] : Relevance14-24
      • [C] : Documents Not Already Possessed by the Service14-30
      • [D] : Administrative Procedures14-33
    • § 14:2.2 : Evidentiary Hearings and Discovery14-37
    • § 14:2.3 : Request from a Foreign Government14-39
  • § 14:3 : Third-Party Summonses14-40
    • § 14:3.1 : Pre-Taxpayer Bill of Rights 314-40
    • § 14:3.2 : Taxpayer Bill of Rights 314-44
      • [A] : Taxpayer Bill of Rights 3 and Service by Mail to Third-Party Recordkeepers14-52
  • § 14:4 : “John Doe” Summons14-54
  • § 14:5 : Required Records Summons14-55
  • § 14:6 : Defenses to Summons Enforcement Actions14-56
    • § 14:6.1 : Powell Defenses14-57
    • § 14:6.2 : Privileges14-57
      • [A] : Attorney-Client Privilege and Tax Practitioner Privileges14-57
      • [B] : Work Product Doctrine14-67
      • [C] : Fifth Amendment Privilege14-70
      • [D] : Fifth Amendment—Act of Production and Required Records Exception14-78
    • § 14:6.3 : Miscellaneous Defenses14-80
  • § 14:7 : Suspension of Statute of Limitations14-82
    • § 14:7.1 : Miscellaneous Changes Made by Taxpayer Bill of Rights 214-83
    • § 14:7.2 : Designated Summonses and Related Summonses14-83
    • § 14:7.3 : Third-Party Summonses14-86
    • § 14:7.4 : Formal Document Request Under Section 98214-87
  • § 14:8 : Notice of Contact of Third Parties14-89
    • § 14:8.1 : Notice of Contact of Third Parties: Final Regulations14-90
      • [A] : Third-Party Contacts: In General14-90
      • [B] : “Initiated by an IRS Employee”14-90
      • [C] : “Person Other Than the Taxpayer”14-92
      • [D] : “With Respect to the Determination or Collection” of Tax14-94
      • [E] : “Discloses the Identity of the Taxpayer Being Investigated”14-99
      • [F] : “Discloses the Association of the IRS Employee”14-100
      • [G] : Pre-Contact Notice Requirement14-100
      • [H] : Post-Contact Reports Requirement14-100
      • [I] : Exceptions14-105
      • [J] : Effective Date14-111
      • [K] : Taxpayer Remedy14-111
    • § 14:8.2 : IRS Contact Letters14-111
Chapter 15: Major Civil Penalties; and Appendix 15A
  • § 15:1 : Introduction to Civil Penalties15-6
  • § 15:2 : Reasonable Cause: The Almost Global Defense15-10
    • § 15:2.1 : Reasonable Cause Exception to Section 6662 Penalties15-11
    • § 15:2.2 : Facts and Circumstances Taken into Account15-12
    • § 15:2.3 : Ordinary Business Care and Prudence15-14
    • § 15:2.4 : Reliance on Opinion or Advice15-16
    • § 15:2.5 : Written Advice from the IRS15-22
    • § 15:2.6 : Oral Advice from the IRS15-22
    • § 15:2.7 : Ignorance of the Law15-23
    • § 15:2.8 : Mistake Was Made15-23
    • § 15:2.9 : Death, Serious Illness, or Unavoidable Absence15-24
    • § 15:2.10 : Administrative Waiver15-25
    • § 15:2.11 : Fire, Casualty, Natural Disaster, or Other Disturbance15-25
    • § 15:2.12 : Official Disaster Area15-26
    • § 15:2.13 : Reasonable Cause Exceptions Expanded15-26
    • § 15:2.14 : Reasonable Cause in TEFRA Cases15-26
    • § 15:2.15 : Examples of Reasonable Cause in Failure to File and Failure to Pay Cases15-29
    • § 15:2.16 : Reasonable Cause Defense for Preparers15-33
  • § 15:3 : Penalties Imposed on the Taxpayer15-35
    • § 15:3.1 : Failure to Timely File Tax Return15-35
    • § 15:3.2 : Fraudulent Failure to File15-38
    • § 15:3.3 : Failure-to-Pay15-39
      • [A] : Mitigation of Penalty for Individual’s Failure to Pay During Period of Installment Agreement15-42
    • § 15:3.4 : Estimated Taxes15-43
      • [A] : Failure by an Individual to Pay Estimated Income Tax (Section 6654)15-45
      • [B] : Failure by a Corporation to Pay Estimated Income Tax (Section 6655)15-47
        • [B][1] : Annualized Income Installment or Adjusted Seasonal Installment Method15-47
    • § 15:3.5 : Accuracy-Related Penalties15-48
      • [A] : In General15-48
      • [B] : Negligence or Disregard of Rules or Regulations15-51
        • [B][1] : Negligence15-53
        • [B][2] : Reasonable Basis15-56
        • [B][3] : Disregard of Rules and Regulations15-57
        • [B][4] : Disclosure, Reasonable Cause, and Good Faith15-57
        • [B][5] : Exception for Adequate Disclosure15-58
        • [B][6] : Method of Making Disclosure15-59
          • [B][6][a] : Comprehensive15-59
        • [B][7] : Burden of Proof15-60
      • [C] : Any Substantial Understatement of Income Tax15-61
        • [C][1] : In General15-61
        • [C][2] : Special Rules in the Case of Carryovers15-62
        • [C][3] : Substantial Authority Standard15-62
        • [C][4] : Determination of Whether Substantial Authority Is Present: Evaluation of Authorities15-63
        • [C][5] : Determination of Whether Substantial Authority Is Present: Nature of Analysis15-63
        • [C][6] : Determination of Whether Substantial Authority Is Present: Types of Authority15-64
        • [C][7] : Determination of Whether Substantial Authority Is Present: Special Rules15-65
          • [C][7][a] : Written Determinations15-65
          • [C][7][b] : Taxpayer’s Jurisdiction15-66
          • [C][7][c] : When Substantial Authority Is Determined15-66
          • [C][7][d] : List of Positions15-67
        • [C][8] : Adequate Disclosure15-67
        • [C][9] : Method of Making Adequate Disclosure15-67
      • [D] : Any Substantial Valuation Misstatement15-70
        • [D][1] : Transfer Pricing Underpayments15-70
        • [D][2] : Substantial Valuation Misstatement15-71
        • [D][3] : Specified Method with Documentation Exclusion15-72
        • [D][4] : Foreign-to-Foreign Transaction Exclusion15-72
        • [D][5] : 2001 Report on the Effectiveness of Section 6662(e)15-73
      • [E] : Any Substantial Overstatement of Pension Liabilities15-74
      • [F] : Any Substantial Estate or Gift Tax Valuation Understatement15-74
      • [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 Law15-75
        • [G][1] : Discussion of Economic Substance Doctrine15-75
      • [H] : Penalties for Underpayments Attributable to Undisclosed Foreign Financial Assets15-82
      • [I] : Increase in Penalty in Case of Gross Valuation Misstatements15-84
    • § 15:3.6 : Civil Fraud15-84
      • [A] : Pre-1987 Tax Returns15-84
      • [B] : Pre-1990 Tax Returns15-85
      • [C] : Post-1989 Tax Returns15-85
      • [D] : The Meaning of Fraud15-86
    • § 15:3.7 : International Penalties15-94
      • [A] : Section 603815-95
        • [A][1] : Substantial Compliance15-96
        • [A][2] : Reasonable Cause Defense to Section 603815-101
      • [B] : Section 6721 and 6722 and Intentional Disregard Penalties15-102
    • § 15:3.8 : Sanctions and Costs for Delay or Frivolity (Section 6673)15-104
    • § 15:3.9 : Frivolous Tax Returns and Submissions (Section 6702)15-106
      • [A] : Tax Relief and Health Care Act of 200615-106
        • [A][1] : Penalty for Frivolous Returns15-106
        • [A][2] : Penalty for Frivolous Submissions15-107
        • [A][3] : Listing of Frivolous Positions15-108
        • [A][4] : Reduction of Penalty15-108
        • [A][5] : Penalty in Addition to Other Penalties15-108
        • [A][6] : Effective Date15-108
    • § 15:3.10 : Erroneous Claim for Refund or Credit Penalty15-109
      • [A] : Section 667615-109
      • [B] : Calculation of the Section 6676 Penalty15-110
    • § 15:3.11 : Civil FBAR Penalties15-111
      • [A] : Willful Standard and Burden of Proof15-116
      • [B] : Is a Foreign Credit Card a Financial Account?15-118
      • [C] : Ignorance, Education, and Outreach15-118
    • § 15:3.12 : TEFRA Partnership Penalties15-119
  • § 15:4 : Penalties Imposed on Preparers, Promoters, and Material Advisors15-120
    • § 15:4.1 : Understatement of Taxpayer’s Liability by Tax Return Preparer (Section 6694)15-120
      • [A] : Section 6694—Historical Perspective15-122
      • [B] : Section 6694—Current Perspective15-126
      • [C] : Who Is a Tax Return Preparer?15-127
      • [D] : One Preparer Per Position Per Firm15-130
      • [E] : Examples of “Tax Returns”15-131
      • [F] : Return Affecting Related Entries15-134
      • [G] : Income Derived or to Be Derived15-134
      • [H] : Definition of Tax Return Preparer15-136
      • [I] : Who Is Not a Tax Return Preparer?15-137
      • [J] : Date Return Is Deemed Prepared15-138
    • § 15:4.2 : Understatements Due to Unreasonable Positions (Being Sustained on the Merits)15-138
      • [A] : Exception for Adequate Disclosure of Reasonable Basis Position15-142
    • § 15:4.3 : Understatements Due to Willful or Reckless Conduct (Section 6694(b))15-145
      • [A] : Exceptions for Adequate Disclosure, Etc.15-146
      • [B] : Section 6694 Returns and Claims for Refund15-147
      • [C] : Procedures for Assessment and Collection of Penalty15-148
      • [D] : Burden of Proof15-150
      • [E] : Administrative Appeal Rights and Abatement of Penalty15-150
    • § 15:4.4 : Other Penalties for Income Tax Return Preparers (Section 6695)15-152
    • § 15:4.5 : Injunctions Against Tax Return Preparers15-157
    • § 15:4.6 : OPR Referrals of Assessed Preparer Penalties15-158
    • § 15:4.7 : Improper Disclosure of Information15-160
    • § 15:4.8 : Monetary Penalties Under the Jobs Act15-162
    • § 15:4.9 : Substantial and Gross Valuation Misstatements Attributable to Incorrect Appraisals15-164
    • § 15:4.10 : Penalties for Aiding and Abetting Understatement of Tax Liability (Section 6701)15-164
    • § 15:4.11 : Procedures Applicable to Penalties Found in Sections 6700 and 670115-166
  • § 15:5 : Penalties Imposed on the IRS15-169
    • § 15:5.1 : Unauthorized Inspection or Disclosure of Returns and Unauthorized Collection Actions15-169
    • § 15:5.2 : Suspension of Interest and Penalties Where the IRS Fails to Contact the Taxpayer (Section 6404(g))15-176
      • [A] : Notice Requirement: IRS Position15-178
      • [B] : Tax Court Litigation15-178
      • [C] : Voluntary Reporting of Additional Taxes15-179
      • [D] : Final Regulations Issued15-179
    • § 15:5.3 : Interest on Taxes Abated in Federally Declared Disaster Areas15-180
      • [A] : Required Notices15-180
    • § 15:5.4 : Designation of Tax Deposits to Mitigate the Failure-to-Deposit Penalty (Section 6656)15-180
  • § 15:6 : Procedural Rules—Requesting Penalty Relief15-181
    • § 15:6.1 : Assessable Penalties15-181
    • § 15:6.2 : Post-Assessment Review15-181
    • § 15:6.3 : Pre-Assessment Review by Appeals15-184
    • § 15:6.4 : Deficiency Procedures15-185
    • § 15:6.5 : Appeals Review of International Penalties15-186
    • § 15:6.6 : Penalty Abatement Request15-187
    • § 15:6.7 : Qualified Amended Return and Revenue Procedure 94-6915-188
  • § 15:7 : Additional Penalties for Tax Shelters/Reportable Transactions15-191
    • § 15:7.1 : Historical Perspective15-191
      • [A] : Office of Tax Shelter Analysis15-192
    • § 15:7.2 : Federal Tax Shelter Rules15-192
    • § 15:7.3 : Transactions Entered into Before January 1, 200315-193
      • [A] : Listed Transaction (or Substantially Similar Listed Transaction)15-194
      • [B] : Other Reportable Transactions (Potentially Abusive Tax Shelter)15-195
    • § 15:7.4 : General Disclosure Principles (Section 6011)15-197
      • [A] : Additional Modifications15-199
      • [B] : Final Regulations15-199
        • [B][1] : In General15-199
        • [B][2] : Listed Transactions15-200
          • [B][2][a] : Listed Transactions in Chronological Order15-201
        • [B][3] : Reportable Transactions15-203
          • [B][3][a] : Confidential Transactions15-203
          • [B][3][b] : Transactions with Contractual Protection15-204
          • [B][3][c] : Loss Transactions15-205
        • [B][4] : Transactions of Interest15-208
      • [C] : Transactions Involving a Brief Asset Holding Period15-209
      • [D] : Special Participation Rules for Reporting Shareholders15-210
        • [D][1] : Definition of “Reporting Shareholder”15-210
        • [D][2] : Reportable Transactions15-211
      • [E] : Disclosure15-211
        • [E][1] : Special Rules15-211
        • [E][2] : Registration Numbers15-212
      • [F] : Record Retention Requirements15-212
  • § 15:8 : Registration of Tax Shelters; Material Advisors15-213
  • § 15:9 : State Tax Shelter Rules15-215
  • § 15:10 : Special Rules for Reasonable Cause Defense to Tax Shelter Items15-215
  • § 15:11 : Reportable Transactions Penalty15-216
    • § 15:11.1 : Reportable Transaction Understatement15-217
    • § 15:11.2 : Item Defined15-217
    • § 15:11.3 : Higher Penalty for Nondisclosed Items15-217
    • § 15:11.4 : Section 6662A Reasonable Cause Exception15-218
    • § 15:11.5 : Definitions of Reportable and Listed Transactions15-219
    • § 15:11.6 : Special Rules: Coordination with Penalties on Other Understatements15-219
    • § 15:11.7 : Special Rules: Coordination with Other Penalties15-220
    • § 15:11.8 : Special Rule for Amended Returns15-220
    • § 15:11.9 : Interest on Unpaid Taxes Attributable to Non-Disclosed Reportable Transactions15-220
  • § 15:12 : Promoting Abusive Tax Shelters (Section 6700)15-221
  • § 15:13 : Taxpayer’s Failure to Include Reportable Transaction Information with Return (Section 6707A)15-223
    • § 15:13.1 : Imposition of Penalty15-224
    • § 15:13.2 : Failure to Disclose—Extension of the Statute of Limitations15-224
    • § 15:13.3 : Amount of Penalty15-224
    • § 15:13.4 : Definitions15-225
    • § 15:13.5 : Authority to Rescind Penalty15-225
    • § 15:13.6 : No Judicial Appeal15-226
    • § 15:13.7 : Penalty Reported to the SEC15-227
    • § 15:13.8 : Coordination with Other Penalties15-228
    • § 15:13.9 : Reporting by the Commissioner15-228
  • § 15:14 : Actions to Enjoin Promoters of Abusive Tax Shelters and Other Individuals and Conduct15-228
  • § 15:15 : Failure to Furnish Information Regarding Reportable Transactions (Section 6707)15-229
  • § 15:16 : Investor List Maintenance Requirements15-231
    • § 15:16.1 : Background15-231
    • § 15:16.2 : Persons Required to Maintain Lists of Investors and Composition of the Lists15-232
    • § 15:16.3 : Maintaining the List15-233
    • § 15:16.4 : Furnishing the List to the IRS15-234
    • § 15:16.5 : Failure-to-Maintain-List Penalty15-234
  • § 15:17 : Failure to Maintain Lists of Advisees with Respect to Reportable Transactions15-234
  • § 15:18 : Excise Tax on Certain Tax-Exempt Entities Entering into Prohibited Tax Shelter Transactions15-235
    • § 15:18.1 : Background15-235
    • § 15:18.2 : Being a Party to or Approving of Prohibited Transactions15-235
      • [A] : Tax-Exempt Entity15-235
      • [B] : Entity Manager15-236
      • [C] : Tax Imposed on Entity: No Knowledge or Reason to Know15-236
      • [D] : Tax Imposed on Entity: Knowing or Reason to Know15-237
      • [E] : Tax Imposed on Entity Manager15-238
    • § 15:18.3 : Tax-Exempt Entity Defined15-238
    • § 15:18.4 : Entity Manager Defined15-239
    • § 15:18.5 : Disclosure Requirements15-239
    • § 15:18.6 : Prohibited Tax Shelter Transaction Defined15-241
    • § 15:18.7 : Subsequently Listed Transaction Defined15-241
    • § 15:18.8 : Regulatory Authority15-241
    • § 15:18.9 : Coordination with Other Taxes and Effective Date15-241
  • Appendix 15A : Summary Chart For Civil Tax-Related PenaltiesApp. 15A-1
Chapter 16: Civil and Criminal Tax Fraud; and Appendix 16A
  • § 16:1 : Introduction16-4
  • § 16:2 : Four Major Tax Crimes16-9
    • § 16:2.1 : Shorthand Formula for Any Criminal Tax Case16-9
    • § 16:2.2 : Section 7201 Attempt to Evade or Defeat Tax16-10
      • [A] : Additional Tax Due and Owing16-12
      • [B] : Defendant Knew More Federal Income Tax Was Owed16-16
      • [C] : Affirmative Attempt to Evade or Defeat16-16
      • [D] : Defendant Acted Willfully16-21
      • [E] : Civil Fraud Considerations16-32
    • § 16:2.3 : Section 7206(1) Fraud and False Statement16-33
      • [A] : Return, Statement, or Document16-35
      • [B] : “Makes” Any Return, Statement, or Document16-38
      • [C] : “Subscribes” Any Return, Statement, or Document16-39
      • [D] : Made Under Penalties of Perjury16-42
      • [E] : False Material Matter16-42
      • [F] : Willfulness—Does Not Believe to Be True and Correct16-53
    • § 16:2.4 : Section 7206(2) Assisting in the Preparation of a False Return16-55
      • [A] : Aiding and Assisting16-58
      • [B] : False Material Matter16-63
      • [C] : Willfulness16-64
    • § 16:2.5 : 18 U.S.C. § 371 Conspiracy to Commit Offense or to Defraud the United States16-66
      • [A] : Agreement16-68
      • [B] : Membership16-70
      • [C] : Overt Act16-72
      • [D] : The Klein Conspiracy: Conspiracy to Defraud the United States16-73
    • § 16:2.6 : General Observations About These Four Tax Crimes16-95
    • § 16:2.7 : Proof Beyond a Reasonable Doubt in a Tax Prosecution16-95
    • § 16:2.8 : Common Defenses Raised in Tax Prosecutions16-96
      • [A] : Good Faith16-97
      • [B] : Reliance on Return Preparer/Accountant16-98
      • [C] : Reliance on Advice of Counsel16-100
      • [D] : Cheek No Defense in Non-Tax Cases16-101
      • [E] : Fifth Amendment—Freedom from Self-Incrimination16-101
      • [F] : Fifth Amendment—Act of Production and Required Records Exception16-104
      • [G] : IRS Deception16-106
      • [H] : Selective Prosecution Defense16-107
    • § 16:2.9 : Methods of Proving the Tax Deficiency16-110
      • [A] : In General16-111
      • [B] : Specific Items Method of Proof16-113
      • [C] : Bank Deposits Method of Proof16-115
      • [D] : Net Worth Method of Proof16-122
      • [E] : Expenditures Method of Proof16-126
      • [F] : The Cash Method of Proof16-129
      • [G] : Percentage Mark-Up16-129
    • § 16:2.10 : Proving Willfulness—Badges of Fraud16-129
      • [A] : Classic Spies Badges of Fraud16-130
      • [B] : More Badges of Fraud16-130
      • [C] : Additional Badges of Fraud from Former IRM 94016-132
      • [D] : Badges of Fraud in Civil Cases16-134
    • § 16:2.11 : Final Comments on Willfulness16-138
  • § 16:3 : Other Tax Crimes16-142
    • § 16:3.1 : Section 7203 Willful Failure to File Return, Supply Information, or Pay Tax16-142
    • § 16:3.2 : Section 7207 Fraudulent Returns, Statements, or Other Documents16-143
    • § 16:3.3 : Section 7202 Willful Failure to Collect or Pay Tax16-143
    • § 16:3.4 : Section 7204 Fraudulent Statement or Failure to Make Statement to Employees16-144
    • § 16:3.5 : Section 7205 Fraudulent Withholding Exemptions Certificate or Failure to Supply Information16-147
    • § 16:3.6 : Fraud and False Statements16-147
      • [A] : Section 7206(3) Fraudulent Bonds, Permits, and Entries16-147
      • [B] : Section 7206(4) Removal or Concealment with Intent to Defraud16-147
      • [C] : Section 7206(5) Compromises and Closing Agreements16-148
    • § 16:3.7 : Section 7210 Failure to Obey Summons16-148
    • § 16:3.8 : Section 7212 Attempts to Interfere with Administration of Internal Revenue Laws16-148
    • § 16:3.9 : Section 7213(a)(1)–(4) Unauthorized Disclosure of Returns and Return Information16-152
    • § 16:3.10 : Section 7216 Disclosure or Use of Information by Preparers of Tax Returns16-153
    • § 16:3.11 : Section 7214(a) Offenses by Officers and Employees of the United States16-154
  • § 16:4 : Statute of Limitations16-156
  • § 16:5 : Evolution of a Criminal Tax Case16-158
    • § 16:5.1 : Pre-CI Referral—the Eggshell Audit16-159
    • § 16:5.2 : Fraud Technical Advisor16-159
    • § 16:5.3 : IRS Criminal Referrals16-160
    • § 16:5.4 : Investigation by CI—Administrative Versus Grand Jury Investigations16-167
      • [A] : Background16-167
      • [B] : Administrative Investigation16-168
      • [C] : Grand Jury Investigation16-169
    • § 16:5.5 : Authorization by Department of Justice Tax Division16-170
    • § 16:5.6 : Government’s Standard of Review for a Criminal Tax Case16-170
  • § 16:6 : How to Spot a Criminal Investigation16-171
  • § 16:7 : Representing the Taxpayer Before Indictment in a Criminal Investigation16-173
  • § 16:8 : Voluntary Disclosure16-178
    • § 16:8.1 : In General16-179
    • § 16:8.2 : Voluntary Disclosure—July 16, 2002 Version16-182
    • § 16:8.3 : Voluntary Disclosure—Revised December 11, 2002 Version16-184
    • § 16:8.4 : Voluntary Disclosure—Revised September 9, 2004 Version16-188
    • § 16:8.5 : Voluntary Disclosure—Revised March 26, 2009 Version, Regarding Secret Foreign Bank Accounts16-193
    • § 16:8.6 : Voluntary Disclosure—Revised June 26, 2009 Version16-197
    • § 16:8.7 : Voluntary Disclosure—Revised December 2, 2009 Version16-200
    • § 16:8.8 : Voluntary Disclosure for Swiss Banks—August 29, 201316-203
    • § 16:8.9 : General Procedures for Voluntary Disclosure16-206
      • [A] : Make Sure There Is No Triggering Event16-206
      • [B] : Tell the Client He Will Be Identified to the IRS16-206
      • [C] : Do Not Incriminate the Client16-207
      • [D] : Move Quickly16-208
      • [E] : Do Not File Fraudulent Amended Returns16-209
      • [F] : File Enough Returns16-209
      • [G] : Quiet or Noisy Voluntary Disclosure?16-210
    • § 16:8.10 : Streamlined Program16-210
  • § 16:9 : Dual Prosecution16-212
  • § 16:10 : Miranda Warnings16-214
  • § 16:11 : IRS Undercover Operations16-215
  • § 16:12 : Government Violation of Taxpayer Bill of Rights16-221
  • § 16:13 : Parallel Investigations16-222
    • § 16:13.1 : Permitted Parallel Investigations16-225
    • § 16:13.2 : Background16-226
    • § 16:13.3 : Government Participants in Six-Way Conference16-227
    • § 16:13.4 : Goals and Topics Discussed in Six-Way Conference16-227
    • § 16:13.5 : Factors and Determinations in Parallel Investigations16-228
    • § 16:13.6 : Sharing Information16-229
    • § 16:13.7 : Coordination of Participant Examinations16-230
    • § 16:13.8 : Parallel Investigations and Collection Matters16-231
    • § 16:13.9 : Evidentiary Problem in the Parallel Investigation16-231
  • § 16:14 : Phishing Initiative16-232
  • § 16:15 : Whistleblower Program16-233
    • § 16:15.1 : Introduction16-233
    • § 16:15.2 : Awards in General16-234
    • § 16:15.3 : Awards in Cases of Less Substantial Contribution16-235
    • § 16:15.4 : Reduction in or Denial of Award16-236
    • § 16:15.5 : Appeal of Award Determination16-236
    • § 16:15.6 : Additional Rules16-236
    • § 16:15.7 : Effective Date16-237
    • § 16:15.8 : Above the Line Deduction for Attorneys’ Fees and Court Costs16-237
  • § 16:16 : Whistleblower Office16-237
    • § 16:16.1 : Establishment of Office and Guidance16-237
    • § 16:16.2 : Operation of Office16-237
    • § 16:16.3 : Request for Assistance16-238
    • § 16:16.4 : Report by Secretary16-238
  • Appendix 16A : Criminal Penalties in Tax Related MattersApp. 16A-1
Chapter 17: The Collection Process
  • § 17:1 : Authority17-6
    • § 17:1.1 : Taxpayer Bill of Rights17-9
    • § 17:1.2 : Statute of Limitations Generally Not to Be Extended17-11
    • § 17:1.3 : Approval Process for Liens, Levies, and Seizures17-15
  • § 17:2 : Notice and Demand17-16
  • § 17:3 : Disclosure of Collection Activity Regarding Joint Returns17-18
    • § 17:3.1 : Explanation of Joint and Several Liability17-18
    • § 17:3.2 : Separate Notice to Each Filer17-19
  • § 17:4 : Federal Tax Liens—When Your Client Cannot Pay in Full17-19
    • § 17:4.1 : Notice and Hearing Requirement—Taxpayer Bill of Rights 3 and Collection Due Process17-23
      • [A] : Notice17-23
      • [B] : Timely Written Request Requirement for Appeals Office Hearing17-25
      • [C] : One Hearing Only Rule17-28
      • [D] : Prohibition of “Prior Involvement”17-30
      • [E] : Conduct of the Hearing17-30
      • [F] : Verification by Appeals Officer and Issues Taxpayer May Raise (Including Spousal Defenses)17-34
      • [G] : Determination by Appeals Officer17-39
      • [H] : Notice of Determination17-39
      • [I] : Subsequent Judicial Review17-41
      • [J] : Retained Jurisdiction by Appeals and Changed Circumstances of the Taxpayer17-44
      • [K] : Statute of Limitations Suspended17-45
      • [L] : Enforcement Action During Suspension of Statute of Limitations17-46
      • [M] : Hearings Combined17-46
      • [N] : Equivalent Hearing17-46
      • [O] : Effective Date17-49
  • § 17:5 : Period of Tax Lien17-50
  • § 17:6 : Property to Which the Federal Tax Lien Attaches17-50
    • § 17:6.1 : Real Property17-51
    • § 17:6.2 : Personal Property17-51
    • § 17:6.3 : Forms of Ownership17-51
      • [A] : Individual17-52
      • [B] : Joint Tenancy17-52
      • [C] : Tenants in Common17-53
      • [D] : Tenancy by the Entirety17-54
      • [E] : Community Property17-54
      • [F] : Trusts17-56
      • [G] : Partnerships and Joint Ventures17-58
      • [H] : Terminable Interests17-60
      • [I] : Property in the Custody of a Court17-60
      • [J] : Property Held By Third Parties17-61
  • § 17:7 : Filing Notice of Tax Lien and Priority of Liens17-63
    • § 17:7.1 : Place of Filing Notice of Tax Lien17-64
    • § 17:7.2 : Priority of the Federal Tax Lien17-65
      • [A] : Priority Before the Federal Tax Lien Arises17-67
      • [B] : Priority After the Federal Tax Lien Arises but Before an NFTL Is Filed17-69
      • [C] : Priority After the Federal Tax Lien Arises and After an NFTL Is Filed: The Superpriorities17-74
    • § 17:7.3 : Securities17-74
    • § 17:7.4 : Motor Vehicles17-75
    • § 17:7.5 : Personal Property Purchased at Retail17-75
    • § 17:7.6 : Personal Property Purchased in Casual Sale17-76
    • § 17:7.7 : Personal Property Subject to Possessory Lien17-76
    • § 17:7.8 : Real Property Tax and Special Assessment Lien17-76
    • § 17:7.9 : Residential Property Subject to a Mechanic’s Lien (Certain Repairs and Improvements)17-77
    • § 17:7.10 : Attorneys’ Liens17-77
    • § 17:7.11 : Certain Insurance Contracts17-78
    • § 17:7.12 : Passbook Loans17-78
    • § 17:7.13 : Purchase Money Security Interests17-79
    • § 17:7.14 : Commercial Transaction Financing Agreements17-79
    • § 17:7.15 : Real Property Construction or Improvement Financing Agreement17-81
    • § 17:7.16 : Obligatory Disbursement Agreement17-82
    • § 17:7.17 : Section 6323(d)17-82
    • § 17:7.18 : Withdrawal of Certain Notices17-83
  • § 17:8 : Tax Liens and Bankruptcy17-87
  • § 17:9 : Special Liens for Estate and Gift Taxes17-87
    • § 17:9.1 : Liens for Estate Taxes17-87
    • § 17:9.2 : Liens for Gift Taxes17-88
    • § 17:9.3 : Exceptions to Special Estate Tax Liens17-88
  • § 17:10 : Preventing the IRS from Filing the Notice of Tax Lien or Securing Its Release17-89
    • § 17:10.1 : Release of Lien17-90
    • § 17:10.2 : Liability Satisfied or Unenforceable17-91
    • § 17:10.3 : Bond Accepted17-91
    • § 17:10.4 : Discharge of Property17-91
      • [A] : Property Double the Amount of Liability17-91
      • [B] : Part Payment17-92
      • [C] : Interest of United States Valueless17-92
      • [D] : Substitution of Proceeds of Sale17-92
    • § 17:10.5 : Subordination of Lien17-92
    • § 17:10.6 : Nonattachment of Lien17-93
    • § 17:10.7 : Administrative Appeal of Erroneously Filed Lien17-93
    • § 17:10.8 : Civil Action for Failure to Release Lien17-95
    • § 17:10.9 : Third Parties Provided with Procedure for Release of Erroneously Filed Lien17-97
  • § 17:11 : Levy and Distraint17-100
    • § 17:11.1 : Continuous Levies and the Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform Act of 199817-101
    • § 17:11.2 : Release of Levy17-103
      • [A] : Return of Property—Statutory Scheme17-105
      • [B] : Return of Property—Regulatory Scheme17-105
        • [B][1] : In General17-105
        • [B][2] : Return of Levied upon Property in Possession of IRS Pending Sale Under Section 633517-106
        • [B][3] : Conditions Authorizing Return of Property17-106
        • [B][4] : Best Interests of the United States and the Taxpayer to Release Levy and Return of Property Where Levy Made in Violation of Law17-108
        • [B][5] : Time of Return17-109
        • [B][6] : Purchase by the United States17-109
        • [B][7] : Determinations by the Commissioner17-109
        • [B][8] : Procedures for Request for the Return of Property17-110
        • [B][9] : No Interest17-110
        • [B][10] : Administrative Collection upon Default17-110
        • [B][11] : Effective Date17-111
    • § 17:11.3 : Prerequisites for a Valid Levy—Taxpayer Bill of Rights 117-111
    • § 17:11.4 : Prerequisites for a Valid Levy—Taxpayer Bill of Rights 3 and Collection Due Process (and Related Matters)17-113
      • [A] : Notice17-114
      • [B] : Timely Written Request Requirement for Appeals Office Hearing17-116
      • [C] : One Hearing Only Rule17-119
      • [D] : Prohibition of “Prior Involvement”17-121
      • [E] : Conduct of the Hearing17-123
        • [E][1] : In General17-123
        • [E][2] : Face-to-Face Meetings—Former Regulations17-123
        • [E][3] : Face-to-Face Meetings—Present Regulations17-129
        • [E][4] : Miscellaneous Matters17-133
      • [F] : Verification by Appeals Officer and Issues Taxpayer May Raise (Including Spousal Defenses)17-134
      • [G] : Determination by Appeals Officer17-146
      • [H] : Notice of Determination17-147
      • [I] : Subsequent Judicial Review17-148
      • [J] : Retained Jurisdiction by Appeals and Changed Circumstances of Taxpayer17-168
      • [K] : Statute of Limitations Suspended17-170
      • [L] : Enforcement Action During Suspension of Statute of Limitations17-170
      • [M] : Hearings Combined17-172
      • [N] : Equivalent Hearing17-172
      • [O] : Jeopardy, State Tax Refund, and Disqualified Employment Tax Levy Exceptions17-176
      • [P] : Offers in Compromise and Installment Agreements17-179
      • [Q] : Administrative Procedures Codified17-179
      • [R] : Frivolous Requests for Hearing17-179
      • [S] : Effective Date17-179
  • § 17:12 : Property Exempt from Levy17-181
    • § 17:12.1 : Wearing Apparel and School Books17-181
    • § 17:12.2 : Fuel, Provisions, Furniture, and Personal Effects17-181
    • § 17:12.3 : Books and Tools of the Trade17-182
    • § 17:12.4 : Unemployment Benefits17-182
    • § 17:12.5 : Undelivered Mail17-182
    • § 17:12.6 : Certain Annuities and Pension Payments17-183
    • § 17:12.7 : Workers’ Compensation17-183
    • § 17:12.8 : Judgments for Support of Minor Children17-183
    • § 17:12.9 : Minimum Exemptions for Wages, Salary, and Other Income17-184
    • § 17:12.10 : Certain Service Connected Disability Payments17-185
    • § 17:12.11 : Additional Property Exempt from Levy17-185
  • § 17:13 : Continuous Levies Authorized17-189
    • § 17:13.1 : Federal Payment Levy Program17-190
  • § 17:14 : Sale of Seized Property17-191
    • § 17:14.1 : IRS Recordkeeping Rules17-194
  • § 17:15 : Civil Suits by the Government17-194
    • § 17:15.1 : Taxpayer and Third-Party Suits to Restrain Collection17-195
  • § 17:16 : Solutions to Collection Problems—Installment Agreements, Offers in Compromise, and Taxpayer Assistance Orders17-198
    • § 17:16.1 : Installment Agreements17-199
      • [A] : Introduction17-199
      • [B] : Typical Forms17-200
      • [C] : General Considerations17-200
      • [D] : Taxpayer Bill of Rights 1 and 2—Installment Agreements Authorized and Appeals Office Review Available17-202
      • [E] : Installment Agreements as a Right—Taxpayer Bill of Rights 3 (“Guaranteed Installment Agreements”)17-203
      • [F] : Streamlined Installment Agreements17-204
      • [G] : Collection Information Statements and Necessary Expenses for “Regular” Installment Agreements—National Standards, Local Standards, and Other Various Expenses17-205
      • [H] : Full Payment in Six Years Rule17-211
      • [I] : Eliminating Excessive Expenses Within One Year17-212
      • [J] : Business Taxpayers17-212
      • [K] : Appeal Rights17-213
      • [L] : Installment Agreement User Fees17-214
      • [M] : Failure to Pay Penalty Cut in Half17-214
      • [N] : Annual Statements to Taxpayers17-214
      • [O] : Levy Restrictions17-215
      • [P] : Partial Installment Agreements17-218
      • [Q] : Online Payment Agreement Application17-219
      • [R] : Multi-Functional Installment Agreements17-220
      • [S] : Federal and State Installment Agreements17-221
    • § 17:16.2 : Offers in Compromise17-222
      • [A] : In General17-224
      • [B] : Grounds for Compromise17-225
      • [C] : Special Rules for Evaluating Offers to Compromise17-227
      • [D] : Procedures for Submission and Consideration of Offers17-232
      • [E] : Acceptance of Offer to Compromise Tax Liability17-234
      • [F] : Rejection of Offer to Compromise and Appeals17-236
      • [G] : Effect of Offer to Compromise on Collection Activity17-237
      • [H] : Deposits17-238
      • [I] : Statute of Limitations17-239
      • [J] : Inspection17-239
      • [K] : Effective Date17-239
      • [L] : Fixed Monthly Payment Option and Relief from Accrued Interest17-240
      • [M] : Default17-241
      • [N] : User Fees17-241
      • [O] : Partial Payment Requirement, User Fees, Miscellaneous Rules, and Frivolous Submissions17-242
    • § 17:16.3 : Taxpayer Assistance Orders17-243
  • § 17:17 : Payment of Tax by Commercially Acceptable Means17-245
  • § 17:18 : Civil Damages for Certain Unauthorized Collection Actions17-246
    • § 17:18.1 : Third Parties May Recover Damages for Unauthorized Collection Actions17-251
  • § 17:19 : Fair Tax Collection Practices Imposed on IRS17-251
  • § 17:20 : Checks to Be Paid to the U.S. Treasury17-253
  • § 17:21 : Practitioner Priority Service (PPS) for Tax Professionals17-253
    • § 17:21.1 : PPS—In General17-253
    • § 17:21.2 : Types of Assistance Offered by PPS17-254
    • § 17:21.3 : Hints for Improving PPS Experience17-255
    • § 17:21.4 : Tips for Calling PPS17-255
    • § 17:21.5 : What Practitioners Should Have on Hand When Calling PPS on an Automated Collection System Account (ACS)17-257
    • § 17:21.6 : What Practitioners Should Expect When Calling PPS for an ACS Account17-258
  • § 17:22 : E-Services for Tax Practitioners17-259
    • § 17:22.1 : Disclosure Authorization17-259
    • § 17:22.2 : Electronic Account Resolution17-259
    • § 17:22.3 : Transcript Delivery System17-259
    • § 17:22.4 : Income Verification Express Service (IVES) Program17-260
  • § 17:23 : Private Debt Collection for Unpaid Taxes17-260
Chapter 18: Recovering Attorney Fees: Section 7430 of the Code and Related Matters
  • § 18:1 : Introduction18-2
  • § 18:2 : In General18-3
  • § 18:3 : Exhaustion of Administrative Remedies18-5
    • § 18:3.1 : Requirements18-5
    • § 18:3.2 : Revocation of Tax Exempt Status18-10
    • § 18:3.3 : Actions Involving Summonses, Levies, Liens, Jeopardy, and Termination Assessments18-12
    • § 18:3.4 : Exception to Requirement to Exhaust Administrative Remedies18-13
    • § 18:3.5 : Examples18-14
  • § 18:4 : Only Costs Allocable to the United States18-18
  • § 18:5 : Pre-Taxpayer Bill of Rights 2: Exclusion of Declaratory Judgment Proceedings18-18
  • § 18:6 : Costs Denied Where Prevailing Party Protracts Proceedings18-18
    • § 18:6.1 : Administrative Proceeding Defined18-20
  • § 18:7 : Reasonable Litigation and Administrative Costs Defined18-20
    • § 18:7.1 : Reasonable Litigation Costs18-20
    • § 18:7.2 : Hourly Cap: “Special Factor” and “Limited Availability”18-24
      • [A] : Taxpayer Bill of Rights 3: Expansion of the “Special Factor”18-33
      • [B] : Taxpayer Bill of Rights 3: Attorney Fees Recoverable When Pro Bono Services Rendered18-34
    • § 18:7.3 : Reasonable Administrative Costs18-34
  • § 18:8 : “Prevailing Party” Defined: Pre-Taxpayer Bill of Rights 2: Burden on the Taxpayer18-35
    • § 18:8.1 : Substantially Justified18-36
  • § 18:9 : “Prevailing Party” Defined: Taxpayer Bill of Rights 2 and 3 and the “Qualified Offer”18-36
    • § 18:9.1 : Final Regulations and the Qualified Offer Rule18-38
      • [A] : In General18-38
      • [B] : Requirements for Treatment As a Prevailing Party Based upon Having Made a Qualified Offer18-40
        • [B][1] : In General18-40
        • [B][2] : Liability Under the Last Qualified Offer18-41
        • [B][3] : Liability Pursuant to the Judgment18-42
      • [C] : Qualified Offer Defined18-42
        • [C][1] : In General18-42
        • [C][2] : To the United States18-43
        • [C][3] : Specifies the Offered Amount18-44
        • [C][4] : Designated at the Time It Is Made As a Qualified Offer18-45
        • [C][5] : Remains Open18-47
        • [C][6] : Last Qualified Offer18-47
        • [C][7] : Qualified Offer Period18-47
      • [D] : Examples18-48
      • [E] : Effective Date18-56
    • § 18:9.2 : Substantially Justified: Burden of Proof Shifts to the IRS18-57
      • [A] : Is the Internal Revenue Manual “Published Guidance”?18-66
    • § 18:9.3 : When the IRS Has Lost in Other Circuits: Taxpayer Bill of Rights 318-69
  • § 18:10 : Manner of Determining Who Is the Prevailing Party18-70
  • § 18:11 : “Position of the United States” Defined18-70
  • § 18:12 : Multiple Actions18-72
  • § 18:13 : Right of Appeal18-72
  • § 18:14 : Timing18-73
  • § 18:15 : Net Worth Requirements18-74
  • § 18:16 : Section 6673 and Rule 1118-76
  • § 18:17 : Reporting of Certain Payments18-78
  Table of Authorities
  Index

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