Form 6x The Hidden Agenda Of Form 6x
The Tax Cloister captivated that the IRS could not appraise frivolous-return penalties on assorted photocopies of a ahead submitted return.
IRS form 6X: Free Download, Create, Edit, Fill and Print … | form 1040x
Facts: The taxpayer, Gwendolyn Kestin, adapted filed a Form 1040, U.S. Individual Assets Tax Return, for tax year 2014 assuming $155,702 of assets and paid the adapted tax due. Later in 2015, Kestin filed a Form 1040X, Adapted U.S. Individual Assets Tax Return, for the aforementioned tax year that showed no assets and requested a acquittance of the taxes ahead paid. Kestin absorbed a letter to the adapted acknowledgment that stated, in part, “I am not active in a ‘trade’ or ‘business’ nor am I an ‘officer of a corporation,’ nor do I authority a accessible office. Therefore I did not accept privileged, taxable ‘wages.’ “
The IRS beatific Kestin a letter advising that the position reflected on the adapted acknowledgment was barmy and warned that it would advance a $5,000 amends beneath Sec. 6702 for a barmy tax position. The letter accustomed her to abstain that amends by acclimation the barmy filing. Rather than accomplishing so, Kestin beatific the IRS a letter arguing adjoin its position, forth with a archetype of the adapted return, formed “photocopy — do not process.” Over the advance of the abutting year, she beatific bristles added photocopies of the adapted return. Anniversary archetype was acutely appointed as such in accompanying correspondence.
The IRS adjourned seven $5,000 penalties adjoin Kestin beneath Sec. 6702, for the aboriginal Form 1040X and the six photocopies. Following an appeal, the IRS issued Kestin a apprehension of assurance to sustain the penalties and a Apprehension of Federal Tax Lien.
Kestin petitioned the Tax Court. In an beforehand order, the cloister accepted the IRS’s motion for arbitrary acumen in part, based on the accustomed actuality that the adapted 2014 acknowledgment was frivolous. However, the cloister ordered balloon on the catechism of how abounding more, if any, barmy allotment Kestin had filed.
Issues: Sec. 6702(a) provides a $5,000 civilian amends if a being files what purports to be a tax acknowledgment beneath the Code but does not accommodate advice by which its abundant definiteness can be discerned or that on its face contains advice advertence that it is essentially incorrect. In addition, the filing charge be based on a position the IRS has listed as barmy beneath Sec. 6702(c) or that reflects a admiration to adjournment or impede the administering of federal tax laws. Kestin accustomed in a post-trial abrupt that the aboriginal Form 1040X was barmy but acknowledged the amends with account to it on procedural area and with account to the photocopies because she did not acceptation them to be returns.
The IRS cited Whitaker, T.C. Memo. 2017-192, and Grunsted, 136 T.C. 455 (2011), both of which upheld Sec. 6702 penalties for anniversary of two essentially agnate Forms 1040 submitted for the aforementioned tax year or years. The IRS additionally acicular to Internal Revenue Manual (IRM) Section 126.96.36.199(4), which advises that Sec. 6702(a) penalties may be adjourned behindhand of whether a affirmation for acquittance and the signature on it are aboriginal or copies.
Holding: The Tax Cloister acclaimed that the photocopies of the Form 1040X were all absolutely apparent “copy” and were in actuality copies of the aboriginal Form 1040X; thus, they did not acceptation to be allotment for the purposes of Sec. 6702(a). Kestin approved alone one acquittance of the assets tax ahead appear on the aboriginal (nonfrivolous) Form 1040 return, not seven refunds of that amount.
The cloister additionally acclaimed these facts from those in Whitaker and Grunsted, in anniversary of which the allotment were active and declared to be returns. As for the IRM, besides defective the force of law, IRM Section 188.8.131.52(5) added advises that IRS cadre should not appraise the amends if they are clumsy to actuate whether a filing is an added affirmation for acquittance or a acknowledgment to the IRS’s appeal for a archetype of a antecedent filing, the cloister noted.
The Tax Cloister appropriately captivated that penalties did not administer to the six copies of the adapted return, abrogation alone one $5,000 frivolous-return amends for the aboriginal adapted return, award its appraisal and administration procedurally valid.
— By Mark A. McCoon, CPA, Ph.D., accessory professor, University of Wisconsin—Superior.
Form 6x The Hidden Agenda Of Form 6x – form 1040x
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