Always Say Never: Does Financial Distress Create Reasonable Cause Sufficient To Abate Tax Penalties?

By Hale Sheppard Nearly all taxpayers will face penalties by the IRS at some point, regardless of their sophistication level and size.  Accordingly, tax practitioners, even those who claim not to get involved in traditional “collection” activities, must understand key aspects of abatement and collection procedures in order to effectively advise their clients.  This is … More Always Say Never: Does Financial Distress Create Reasonable Cause Sufficient To Abate Tax Penalties?

Deconstructing Canal Corp. v. Commissioner – Part III

By Jonathan Prokup and Dustin Covello We now tackle the third question raised by our original post about Canal Corp. v. Comm’r: when (if at all) should courts defer to the opinion of a reputable tax advisor in deciding whether to uphold an assessment of penalties against a taxpayer? To be clear, deference in this … More Deconstructing Canal Corp. v. Commissioner – Part III

Deconstructing Canal Corp. v. Commissioner – Part II

By Dustin Covello and Jonathan Prokup Following up on our earlier post, Deconstructing Canal Corp. v. Commissioner – Part I, we now examine the second question raised by Judge Kroupa’s opinion.  Specifically, where a taxpayer relies on the opinion of an advisor to establish a “reasonable cause and good faith” defense to the imposition of … More Deconstructing Canal Corp. v. Commissioner – Part II

Deconstructing Canal Corp. v. Commissioner – Part I

By Jonathan Prokup and Dustin Covello Many practitioners were taken aback by the recent Tax Court decision in Canal Corp. v. Commissioner, where Judge Kroupa issued a stinging opinion that not only recast a leveraged partnership distribution as a disguised sale, but also upheld penalties against the taxpayer for what the judge characterized as the … More Deconstructing Canal Corp. v. Commissioner – Part I