Penalties And Additions To Tax Attributable To Reliance On Erroneous Written Advice Of IRS
IRS must abate any portion of any penalty or addition to tax that is attributable to erroneous written advice furnished by an officer or employee of IRS (acting in an official capacity) to a taxpayer. (Code Sec. 6404(f); Reg. § 301.64043(a)) The abatement applies only if:
-
The written advice was reasonably relied upon by the taxpayer,
-
The written advice was in response to a specific written request of the taxpayer (Code Sec. 6404(f)(2)(A)), and,
-
The portion of the penalty or addition to tax did not result from a failure by the taxpayer to provide adequate or accurate information. Thus, no abatement is allowed with respect to any portion of any penalty or addition to tax that resulted because the taxpayer requesting the advice did not provide IRS with adequate and accurate information. IRS need not verify or correct information that the taxpayer submits.
To have the penalty removed because of erroneous written advice from the IRS, a taxpayer should complete Form 843, Claim for Refund and Request for Abatement. Attach a copy of the taxpayer's written request for advice from the IRS. Also attach a copy of the IRS reply and the notice assessing the penalty.