Power of attorney justifies disclosure of return information
Article Abstract:
A district court in California ruled in 'Sharer' that Form 2848 or Power of Attorney and Declaration of Representative gives the IRS the authority to reveal confidential tax return information to the attorney-in-fact of the taxpayer. The IRS hand-delivered a letter and attachments to the taxpayer's counsel in Jan 1996 to inform the taxpayer that she had to pay taxes related to the estate of her late husband. The attorney had not represented her about her deceased husband's estate, The IRS held two powers of attorney about the taxpayer on file, one for Form 1040 for the tax years 1983 through 1990 and the other for her husband's estate for the tax years 1985 to 1988, when the letter and attachments were sent. Although Sec 6103 bars the IRS from disclosing tax returns or return information, exceptions to its general prohibitions gave the IRS rationale to disclose the information to the taxpayer's attorney.
Publication Name: Practical Tax Strategies
Subject: Law
ISSN: 0040-0165
Year: 1999
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'Responsible person' can have drug addiction
Article Abstract:
The Second Circuit proclaimed in the 1998 case 'Landau' that a taxpayer with an addiction to cocaine and alcohol was not excused from being held responsible for Sec 6672 penalty for unpaid taxes. The IRS needed to collect the unpaid taxes from the responsible persons and appraised these penalties against Landau. He was the sole owner, chief executive and president of the bankrupt corporation and was addicted to cocaine and alcohol. Sec 6672 describes a two-level test to determine who should be penalized for non-collection or non-payment over trust fund taxes. The Second Circuit introduced in an earlier case a seven-factor approach in identifying the responsible person. In this present case, the court stated that the addiction of Landau did not preclude him from being pegged as a responsible person, which means that he exercised major control and may act in a willful manner.
Publication Name: Practical Tax Strategies
Subject: Law
ISSN: 0040-0165
Year: 1998
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Service may now abate interest for delays caused by managerial acts
Article Abstract:
Final regulations allow the IRS to abate interest charges accrued through the unreasonable error or delays by an IRS officer or employee. Internal Revenue Code Sec 6404(e)(1) limited the abatement to errors or delays due to an IRS official or employee performing a ministerial act. This was expanded to include errors or delays caused by managerial acts through the Taxpayer Bill of Rights 2. Final Regulation 401.6404-2(b)(2) defines what a ministerial and a managerial act is. Also, Final Regulation 401.6404-2(b)(1) and (2) provides clarification that the correct applications of tax law and general administrative decisions are not ministerial or managerial acts. Examples of ministerial acts, managerial acts, general administrative decisions and the proper implementation of tax laws are provided by the regulation.
Publication Name: Practical Tax Strategies
Subject: Law
ISSN: 0040-0165
Year: 1999
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