IRS Tax Tip 2018-100 Corrected
When the IRS issued the June 28 Tax Tip 2018-100
regarding penalty relief, Sacramento Valley Chapter Member David Fogel, EA, CPA was particularly interested in the following paragraph:
“Before asking for First Time Abatement relief, taxpayers can request that the IRS first consider the reasonable cause relief provision. This preserves access to the First Time Abatement, which taxpayers may only use every three years.”
David realized that this conflicted with IRM 18.104.22.168.3.2.1(11):
“11. Per IRM 22.214.171.124, penalty relief under Administrative Waivers, including FTA, is to be considered and applied before reasonable cause. If FTA criteria are met, the FTA waiver will be applied before reasonable cause and the taxpayer must be notified that we removed their penalty or penalties based on their prior history of compliance and not based on their reasonable cause statement.”
David contacted IRS Stakeholder Liaison Marc Zine, which resulted in the IRS removing the statement from the Tax Tip. As David summarizes, “The IRM still controls, and that means that IRS will continue to apply FTA before considering reasonable cause.”
This news was shared by CSEA Tax Research Specialist Joe Calderaro, EA.