A sign is displayed outside the Internal Revenue Service building May 4, 2021, in Washington. Photo: Patrick Semansky/AP Litigating IRS Penalty Approval
Given that the Tax Court applies the law as interpreted by the Court of Appeals in the Circuit where the taxpayer lives, the varying interpretations of the supervisory approval requirement mean that liability for substantial penalties may turn on where the taxpayer resides.
November 16, 2022 at 10:00 AM
9 minute read
Each year the Internal Revenue Service assesses billions of dollars in civil penalties against taxpayers. In 1998, Congress adopted §6751(b) of the Internal Revenue Code, which imposes a procedural restriction on the IRS's ability to assess penalties. That section provides that "[n]o penalty … shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination."
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