IRS Tax Assessment – Abuse of Discretion

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7^th Circuit Court of Appeals

Case Name: Craig J. Kunkel et al v. Commissioner of Internal Revenue

Case No.: 15-2232

Officials: EASTERBROOK and HAMILTON, Circuit Judges, and PEPPER, District Judge.*

Focus: IRS Tax Assessment – Abuse of Discretion

IRS error does not overcome implementation of 20% penalty to taxpayer

“The Tax Court thought reform of the waivers appropriate because only the 2008 tax year had periods of limitations expiring in spring 2012. The forms could not have served any purpose other than extending the time to file assessments for 2008—and you can’t beat something with nothing. Taxpayers’ brief speculates that Bastian thought that he was playing a practical joke on the IRS by signing without alerting it to the scrivener’s error. This seems unlikely; the adverse effect on Bastian’s professional reputation could have been substantial. If the IRS came to conclude that Bastian had tried to hoodwink it, he might find his credentials as a tax representative pulled. The best way to understand what happened is the way the Tax Court did: A typist misread the file, entering the dates on which limitations periods would expire rather than the dates on which the tax years ended, and then everyone else missed that error. We see no clear error or abuse of discretion in that conclusion.”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.