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The USTC has affirmed it will adhere to its decision that the IRS lacks authority to assess Section 6038(b) penalties in cases falling under other circuits of the U.S. Courts of Appeals.
Farhy challenged whether the IRS had the legal authority to assess section 6038 penalties. The Tax Court said no, but on appeal, the D.C. Circuit disagreed.
The question raised in Mukhi was similar to that in Farhy—and the Tax Court wasn’t willing to deviate from that ruling.
On April 3, 2023, the Tax Court in Farhy v. Commissioner rejected IRS efforts to impose penalties on a taxpayer's failure to file Form 5471. According to the Tax Court, these foreign...
The U.S. Tax Court ruled recently that the U.S. Internal Revenue Service has no statutory authority to assess (or collect) civil penalties under IRC §6038(b) for failure to file or...