Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Wednesday, April 23, 2014

Don't Rely on IRS Guidance


Judge Joseph W. Nega recently denied a motion to reconsider his earlier decision that penalized tax lawyer Alvan L. Bobrow for making an IRA rollover move that an IRS Publication says is allowed.  In his order denying the motion, Nega said, “Taxpayers rely on IRS guidance at their own peril.”

Judge Nega wrote that IRS guidance is not “binding precedent” or “substantial authority” to excuse a taxpayer from penalties if he or she follows the guidance and it turns out to be wrong.  If you think that sounds unfair, some of the nation’s most prominent tax lawyers agree with you.  The Board of Regents of the American College of Tax Counsel argues that it undermines public confidence in the tax system to tell taxpayers following IRS guidance that they “have made an error with potentially catastrophic financial consequences.”

See Janet Novack, ‘Taxpayers Rely on IRS Guidance at Their Own Peril,’ Tax Judge Rules, Forbes, Apr. 18, 2014.


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