Tax Court Determines that IRS Must Obtain Written Penalty Approval under I.R.C. Section 6751(b) to Assert Penalties against Taxpayers.... [ read ]
On December 20, the Tax Court issued a supplemental opinion in Graev v. Commissioner, in which it reversed its prior position on I.R.C. Section 6751(b) and agreed with the Second Circuit's decision in Chai v. Commissioner. In Chai, the Second Circuit held that Section 6751(b)(1) requires the IRS to obtain written supervisory approval of an initial penalty determination no later than the date the IRS issues the notice of deficiency or files an answer asserting the penalty. A previous blog post discussed the Chai decision and its impact on pending Tax Court cases.