tag:blogger.com,1999:blog-6398232680738279469.post3180433436374338675..comments2024-03-12T07:30:17.846-07:00Comments on The Tax Times: Reliance on Accountant May Provide Reasonable Basis to Avoid Penalty for Failure to File Foreign Trust FormRonald A. Marini, Esq.http://www.blogger.com/profile/14304486100168506240noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6398232680738279469.post-81895542115516269922012-08-27T13:08:58.186-07:002012-08-27T13:08:58.186-07:00Without a citation one cannot see the court reason...Without a citation one cannot see the court reasoning, and it is only a summary judgement motion. Is this really a duty that can be delegated (it is an oddball type filing, not widely known to the public) - <br /><br />See United States v. Boyle, 469 U.S. 241, 245, 55 AFTR2d 1535, 85 1 USTC ¶13,602 (1985).<br />IRM 1.2.1.2.3 P-1-18 (Approved 04-27-1992) [Policy Statement]<br />IRM 1.2.1.3.3 P-2-7 (Approved 12-29-1970) [Policy Statement<br /><br />The seminal authority for delinquent filing where there is reliance on counsel is United States v. Boyle, 469 U.S. 241, 55 AFTR2d 1535, 85 1 USTC ¶13,602 (1985) which was decided by the Supreme Court holding as follows:<br /><br />SYLLABUS: Respondent, executor of his mother's will, retained an attorney to handle the estate. Respondent provided the attorney with all relevant information and records for filing a federal estate tax return, which under @ 6075(a) of the Internal Revenue Code was required to be filed within nine months of the decedent's death. Respondent inquired of the attorney from time to time as to the preparation of the return and was assured that it would be filed on time. But the return was filed three months late, apparently because of a clerical oversight in omitting the filing date from the attorney's calendar. Acting pursuant to @ 6651(a)(1) of the Code, which provides a penalty for failure to file a return when due "unless it is shown that such failure is due to reasonable cause and not due to willful neglect," the Internal Revenue Service assessed a penalty for the late filing. Respondent paid the penalty and filed a suit in Federal District Court for a refund, contending that the penalty was unjustified because his failure to file the return on time was "due to reasonable [***2] cause," i. e., reliance on his attorney. The District Court agreed and granted summary judgment for respondent. The Court of Appeals affirmed.<br /><br />Held: The failure to make a timely filing of a tax return is not excused by the taxpayer's reliance on an agent, and such reliance is not "reasonable cause" for a late filing under @ 6651(a)(1). While engaging an attorney to assist in probate proceedings is plainly an exercise of the "ordinary business care and prudence" that the relevant Treasury Regulation requires the taxpayer to demonstrate to excuse a late filing, this does not answer the question presented here. To say that it was "reasonable" for respondent to assume that the attorney would meet the statutory deadline may resolve the matter as between them, but not with respect to the respondent's obligation under that statute. It requires no special training or effort on the taxpayer's part to ascertain a deadline and ensure that it is met. That the attorney, as respondent's agent, was expected to attend to the matter does not relieve the principal of his duty to meet the deadline. Pp. 245 252. <br /><br />Posted by Paul A. Studly, Esq. <br />Ronald A. Marini, Esq.https://www.blogger.com/profile/14304486100168506240noreply@blogger.comtag:blogger.com,1999:blog-6398232680738279469.post-76867724205249993052012-08-27T13:06:00.020-07:002012-08-27T13:06:00.020-07:00Something worth reading -
a taxpayer brief-- HEAD...Something worth reading -<br /><br />a taxpayer brief-- HEADLINE: #20 2005 TNT 96-20 LONG TERM CAPITAL HOLDINGS CLAIMS REASONABLE CAUSE TO AVOID PENALTIES. (Long Term Capital Holdings, L.P. et al. v. United States) (No. 04-5687) (United States Court of Appeals for the Second Circuit) (Section 6664 -- Penalty Definitions and Special Rules;) (Release Date: MAY 13, 2005) (Doc 2005-10903)<br />ABSTRACT: In an appellants' reply brief for the Second Circuit, Long Term Capital Holdings has argued that no penalty should be imposed for disallowed capital losses because it acted with reasonable cause and in good faith and that the 40 percent gross undervaluation misstatement penalty is inapplicable.<br /><br />-- 2006 TNT 147-11 COUPLE UNREASONABLY RELIED ON FRAUDULENT TAX RETURN PREPARER. (Ronald A. Lehrer et ux. v. Commissioner) (T.C. Memo. 2006-156) (No. 2381-04) (United States Tax Court) (Section 6662 -- Accuracy-Related Penalty) (Release Date: JULY 31, 2006) (Doc 2006-14380) ABSTRACT: The Tax Court has upheld accuracy-related penalties against a couple that unreasonably relied on a fraudulent tax return preparer, finding that they failed to prove that he was a competent tax adviser to justify their reliance on him and they did not act in good faith regarding their understatements of income tax.<br /><br /><br />Tax Notes Today, MAY 19, 2005 THURSDAY<br />DEPARTMENT: Court Documents; Taxpayer Briefs <br />CITE: 2005 TNT 96-20, LENGTH: 9063 words<br />HEADLINE: #20 2005 TNT 96-20 LONG TERM CAPITAL HOLDINGS CLAIMS REASONABLE CAUSE TO AVOID PENALTIES. (Long Term Capital Holdings, L.P. et al. v. United States) (No. 04-5687) (United States Court of Appeals for the Second Circuit) (Section 6664 -- Penalty Definitions and Special Rules;) (Release Date: MAY 13, 2005) (Doc 2005-10903)<br />CODE: Section 6664 -- Penalty Definitions and Special Rules;<br />Section 6662 -- Accuracy-Related Penalty<br />ABSTRACT: In an appellants' reply brief for the Second Circuit, Long Term Capital Holdings has argued that no penalty should be imposed for disallowed capital losses because it acted with reasonable cause and in good faith and that the 40 percent gross undervaluation misstatement penalty is inapplicable.<br />SUMMARY: Published by Tax AnalystsTM<br />In an appellants' reply brief for the Second Circuit, Long Term Capital Holdings (LTCH) has argued that no penalty should be imposed for disallowed capital losses because it acted with reasonable cause and in good faith and that the 40 percent gross undervaluation misstatement penalty is inapplicable.<br /><br />The lower court denied LTCH's claimed $ 106 million loss and imposed a 40 percent gross valuation misstatement or, in the alternative, a 20 percent substantial understatement penalty. Based on an analysis of the economic substance of the transaction, the court concluded that LTCH had no expectation of making a nontax profit by engaging in its tax shelter transaction. It applied the gross valuation misstatement penalty because LTCH's purported basis in the stock it obtained was over 400 percent of the value the court determined was correct. On appeal, LTCH conceded that it purchased a tax shelter without any economic substance. However, LTCH appealed the district court's decision to impose the gross valuation misstatement penalty. The government filed a reply brief contending that LTCH should be held liable for the penalty because it did not reasonably and in good faith claim its disallowed tax deduction. The government also claimed that the district court properly applied the gross valuation misstatement penalty. <br /><br />Posted by Paul A. Studly, Esq. <br />Ronald A. Marini, Esq.https://www.blogger.com/profile/14304486100168506240noreply@blogger.com