During this webinar, Shawn O’Brien, Edward Froelich, and Michael Scarduzio of our Tax Controversy & Litigation Group discussed recent trends in Internal Revenue Service (IRS) penalty administration and strategies for defeating penalties.

Top takeaways included:

1. Recent trends show that the IRS is increasingly asserting a variety of penalties, including the noneconomic substance penalty and transfer pricing penalties, in conjunction with accuracy-related penalties, even when taxpayers have strong support for their positions.
2. Taxpayers have several avenues to rebut penalties short of litigation, including proactive approaches, engagement with Exam in audit, and filing a protest with IRS Appeals. Taxpayers should consult with counsel to determine the best strategies given their particular circumstances.
3. An effective reasonable cause statement is crucial for defeating most penalties. Relying on a competent and fully informed tax advisor is one of the most compelling grounds for reasonable cause. When submitting any information to the IRS that involves disclosing communications with advisors, taxpayers should carefully weigh the ramifications of privilege waiver against the benefits of potential penalty relief.

Access to the webinar replay is available upon request. Get in touch to learn more.

Looking for more insights on IRS developments, enforcement trends, and practical strategies? Visit our Tax Controversy Webinar Series hub to learn more.