Appeals division gets tough

California CPA, Dec, 2004

The IRS will not settle with taxpayers who participated in certain abusive transactions unless the taxpayers concede 100 percent of the claimed losses or deductions, reduced by only the amount of transaction costs up to 10 percent of the claimed losses or deductions.

Further, taxpayers must concede 50 percent of the accuracy-related penalty at issue. If both the 40 percent gross valuation misstatement penalty and the 20 percent substantial understatement penalty were asserted, then the settlement will apply to the gross valuation misstatement penalty.

For more, visit www.irs.gov/newsroom/article/0,,id=130347,00.html.