Penalties for Failure to Disclose Reportable Transactions

The IRS recently issued proposed regulations for the Section 6707A penalty, imposed on taxpayers who fail to make the required disclosures of “reportable transactions.”  Last week, the Tax Section of the State Bar of Texas filed comments in response to those proposed regulations.  Our letter was discussed in a BNA Daily Tax Report article (subscription required) Wednesday.

We normally focus on just a few specific points in our comments, rather than a longer, comprehensive response.  In this instance, we questioned the definition of the base amount for calculating the penalty and also suggested a change to the factors to be considered for possible rescission of the penalty.

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