Tax filings fall through cracks in the mailbox rule
Article Abstract:
Several courts have held taxpayers responsible when tax filings they submitted through the Postal Service on time did not reach the proper processing channels of the IRS. These courts have ruled that the risks involved in not completing a timely filing should be handled by the taxpayer and not the IRS unless the statutory mailing requirements are complied with to the letter. Sec. 7502 holds that a tax document is considered timely submitted if it is mailed to the IRS and postmarked before the due date of the return. However, even with strong evidence about when a document was sent or received by the IRS, a number of courts have judged that the document was not timely filed if it is the Postal Service or the IRS that loses it. Tax planning guidelines are discussed.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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IRS dual interest rates add costs when no netting
Article Abstract:
The differential interest rate scheme described in Sec. 6621 which was introduced in 1986 has meant that the IRS charges higher interest rates on underpayments than it pays on overpayments. Since then, the IRS has held that it has the power of discretion to charge the higher rate on tax deficiencies of taxpayers who concurrently have outstanding overpayments from other tax years. The Eighth Circuit has taken this side as evidenced by its decision on the 'Northern States Power Co.' case. However, it seems that Congress prefers that the IRS to net overpayments and underpayments before any calculation of the interest on the remainder is made. The IRS released Notice 96-18 on Apr. 1996 as a call for the public to make comments on this issue.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Reasonable cause can be a penalty defense - but what is it?
Article Abstract:
The IRS provides waivers on certain civil penalties in cases when taxpayers and tax professionals are able to establish a reasonable cause for the omission or error for which a penalty has been meted. As the IRS does not have an exact definition of what constitutes 'reasonable cause,' waivers are largely granted on a case to case basis. Not surprisingly, requirements for establishing 'reasonable cause' tend to vary depending on the nature of the civil penalty involved and the particular situation of the taxpayer or tax professional under sanction. Waivers are most commonly granted on such grounds as good faith, a history of compliance, absence of willful neglect and due diligence.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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