§6701 — Penalties for aiding and abetting understatement of tax liability

485, 492-493 (2017), supplementing and overruling in part 147 T.C.

Congress has clearly distinguished the scienter requirement ofsection 6701 from that in other statutes, e.g., section 6694(b) and section 7206(2).

Congress has clearly distinguished the scienter requirement ofsection 6701 from that in other statutes, e.g., section 6694(b) and section 7206(2).

(cid:16)042 A number ofFederal courts have considered whethe the period of limitations in section 6501(a) is applicable for the assessm nt ofpenalties under sections 6700 and 6701. See Mullikin, 952 F.2d at 929 (holding that no period of limitations governs the assessment ofsection 6701 penaltie ); Sage v. United States, 908 F.2d 18, 25 (5th Cir. 1990) (holding that the period oflimitations in section 6501(a) does not apply for the assessment ofsectioii 6700 penalties); Kraye v.

alified appraiser” must (1) hold himself out to the public as an appraiser or perform appraisals on a regular basis, (2) be qualified to make appraisals of the type of property being valued, and (3) acknowledge that aiding and abetting an understatement of tax liability may subject him to a penalty pursuant to section 6701.

nd dated by a qualified appraiser.” A “qualified appraiser” must (1) hold himself out to the public as an appraiser, (2) be qualified to make appraisals of the type of property being valued, and (3) acknowledge that aiding and abetting an understatement of tax liability may subject him to a penalty pursuant to section 6701.

d dated by a qualified appraiser.” A “qualified appraiser” must: (1) hold himself out to the public as an appraiser; (2) be qualified to make appraisals of the type of property being valued; and (3) acknowledge that aiding and abetting an understatement of tax liability may subject him to a penalty pursuant to section 6701.

nd dated by a qualified appraiser.” A “qualified appraiser” must (1) hold himself out to the public as an appraiser, (2) be qualified to make appraisals of the type of property being valued, and (3) acknowledge that aiding and abetting an understatement of tax liability may subject him to a penalty pursuant to section 6701.

A “qualified appraiser” must (1) hold himself out to the public as an appraiser; (2) be qualified to make appraisals of the type of property being valued; and (3) acknowledge that aiding and abetting an understatement of tax liability may subject them to a penalty pursuant to section 6701.

Section 6701 provides for the imposition ofa penalty on any person who aids and abets another person in understating his or her tax liability.

138, 154 (2019), we held that section 6751(b)(1) was potentially applicable but did not apply to the section 6699 penalty at issue in that case because it had been "automatically calculated through electronic means" and was therefore excepted from the written supervisory approval requirement under section 6751(b)(2)(B). "See Kapp v. Commissioner, T.C. Memo. 2019-84, at *94 ("For penalties under section 6701, respondent's burden ofproduction includes the burden of producing evidence establishing

, pursuant to sections 6700 and 6701, respectively, for the years 1982 through 1988.9 The District Court for the 9 Sec. 6700 provides for imposition of a penalty of a percentage of the gross income derived from promoting an abusive tax shelter, and sec. 6701 provides for imposition of a penalty (continued...) - 19 - District of Hawaii sustained the Commissioner's assessments. See Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92- 00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal

, pursuant to sections 6700 and 6701, respectively, for the years 1982 through 1988.9 The District Court for the 9 Sec. 6700 provides for imposition of a penalty of a percentage of the gross income derived from promoting an abusive tax shelter, and sec. 6701 provides for imposition of a penalty (continued...) - 19 - District of Hawaii sustained the Commissioner's assessments. See Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92- 00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal

, pursuant to sections 6700 and 6701, respectively, for the years 1982 through 1988.9 The District Court for the 9 Sec. 6700 provides for imposition of a penalty of a percentage of the gross income derived from promoting an abusive tax shelter, and sec. 6701 provides for imposition of a penalty (continued...) - 19 - District of Hawaii sustained the Commissioner's assessments. See Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92- 00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal

, pursuant to sections 6700 and 6701, respectively, for the years 1982 through 1988.9 The District Court for the 9 Sec. 6700 provides for imposition of a penalty of a percentage of the gross income derived from promoting an abusive tax shelter, and sec. 6701 provides for imposition of a penalty (continued...) - 19 - District of Hawaii sustained the Commissioner's assessments. See Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92- 00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal

, pursuant to sections 6700 and 6701, respectively, for the years 1982 through 1988.9 The District Court for the 9 Sec. 6700 provides for imposition of a penalty of a percentage of the gross income derived from promoting an abusive tax shelter, and sec. 6701 provides for imposition of a penalty (continued...) - 19 - District of Hawaii sustained the Commissioner's assessments. See Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92- 00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal

Courts have uniformly rejected this argument, holding that there is no period of limitations on assessment of penalties under section 6700 or section 6701, which imposes a similar penalty for “aiding and abetting understatement of tax liability.”4 Section 6501(a) provides that a tax must generally be assessed “within 3 years after the return was filed” or (if the tax is payable by stamp) within three years after the tax was paid.

ng prepared for income tax purposes, and must be signed by the appraiser, whose tax identification number must be listed. Accordingly, the appraiser is a person to whom the civil tax penalty for aiding and abetting an understatement oftax liability (sec. 6701) could apply." S. Prt. 98-169 (Vol. I) at 446 (S. Comm. Print 1984). The Commissioner makes no mention of this rationale from the legislative history, nor how it would affect the analysis of "substantial compliance" in this case, so we do n

ities. Section 4941 imposes an excise tax on self-dealing by private foundations. Sections 6671 through 6720 impose assessable penalties for such activities as promoting abusive tax shelters (sec. 6700), aiding and abet- ting understatements oftax (sec. 6701), failing to furnish information about report- able transactions (sec. 6707), and furnishing fraudulent statements to various par- ties (secs. 6690, 6720). And section 6663(a) imposes a civil fraud penalty equal to 75% ofan underpayment ofta

The undersigned understands that a false or fraudulent overstatement ofthe value ofthe property being appraised may subject the appraiser to a civil penalty under Internal Revenue Code section 6701 for aiding and abetting an understatement oftax liability, and consequently, the appraiser may have appraisals disregarded pursuant to 31 U.S.C.

This alternative substantiation must be made on the Form 990 return (not a mere receipt) and thus is potentially subject to civil penalties under section 6701 and, since the return is signed "[u]nder penalties ofperjury", the criminal penalties ofsection 7206(1) as well.

- 24 - (A) [t]he individual either holds himselfor herselfout to the public as an appraiser or performs appraisals on a regular basis; (B) [b]ecause ofthe appraiser's qualifications as described in the (pursuant to (c)(3)(ii)(F) ofthis section), the appraiser is qualified to make appraisals ofthe type ofproperty being valued; (C) [t]he appraiser is not one ofthe persons described in paragraph (c)(5)(iv) ofthis section; and (D) [t]he appraiser understands that an intentionally false or fraudul

) the appraiser is not excluded from qualifying as a qualified appraiserunder section 1.170A-13(c)(5)(iv), Income Tax Regs.;2¹ and (4) the appraiser understands that an intentionally false or fraudulent overstatementofthe value ofthe property described in the qualified appraisal or appraisal summarymay subject the appraiserto a civil penalty under section 6701 for aiding and abetting an understatement oftax liability.

qualifications pursuant (continued...) - 27 - [*27] from qualifying under section 1.170A-13(c)(5)(iv), Income Tax Regs.;" and (4) the appraiser understands that an intentionally false or fraudulent overstatement ofthe value ofthe property described in the qualified appraisal or appraisal summary may subject the appraiser to a civil penalty under section 6701 for aiding and abetting an understatement oftax liability.

Such a (cid:0)541tatemesnetrves as notice to the appraiser that hé or she may be subject to a civil penálty under section 6701 for aiding and abetting an understatement oftax liability, and as a result, that appraisals he or she prepared may be disregarded pursuantto 31 U.S.C.

or performs appraisals regularly ; (2) the appraiser is qualified to make appraisals of the type of property being valued; and (3) the appraiser understands that an intentionally false or fraudulent overstatement of the value of the property described in the qualified appraisal or appraisal summery may subject the appraiser to civil penalty under section 6701 for aiding and abetting an understatement of income tax liability .

- 19 - On May 14, 1990, respondent assessed penalties of $90,000 under section 6701 against Hoyt.

- 19 - On May 14, 1990, respondent assessed penalties of $90,000 under section 6701 against Hoyt.

- 19 - On May 14, 1990, respondent assessed penalties of $90,000 under section 6701 against Hoyt.

- 19 - On May 14, 1990, respondent assessed penalties of $90,000 under section 6701 against Hoyt.

r performs appraisals regularly; (2) the appraiser is qualified to make appraisals of the type of property being valued ; and (3) the appraiser understands that an intentionally false or fraudulent overstatement of the value of the property described in the qualified appraisal or appraisal summary may subject the appraiser to a civil penalty under section 6701 for aiding and abetting an understatement of tax liability .

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Of the $119,700 of abated penalties, $90,000 were penalties under section 6701 assessed against Jay Hoyt sometime in mid-1989.

Chisum’s conduct in this and other cases has created an appropriate occasion for imposition of tax shelter promoter/operator penalties under section 6700 or section 6701, cf., e.g., Kersting v.

The United States filed a counterclaim in the amount of $2,329,700 to reduce the section 6701 penalties - 6 - to judgment, and it brought a separate action to reduce the section 6700 penalties to judgment (Kersting II, Civ.