§6751 — Procedural requirements

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

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

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

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

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

10 [*10] 485, 493 (2017), supplementing and overruling in part 147 T.C.

485, 492–93 (2017), supplementing and overruling in part 147 T.C.

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

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

2015-42), supplementing and overruling in part 147 T.C.

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

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

- 13 - (2017), supplementing and overruling in part 147 T.C.

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

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

485, 492-493 (2017), supplementing and overruling in part Graev v.

485, 492-493 (2017), supplementing and overruling in part Graev v.

2015-42), supplementing and overruling in part 147 T.C.

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

20, 2017), supplementing and overruling in part 147 T.C.

2015-42), supplementing and overruling in part 147 T.C.

20, 2017), supplementing and overruling in part 147 T.C.

2015-42), supplementing and overruling in part 147 T.C.

2015-42), supplementing and overruling in part 147 T.C.

20, 2017), supplementing and overruling in part - 14 - [*14] Graev v.

20, 2017), supplementing and overruling in part 147 T.C.

An SO's responsibilities un- der section 6330(c)(1) also include verification that the IRS has complied with section 6751(b)(1), which provides: "No penalty under this title shall be assessed unless the initial determination ofsuch assessment is personally approved (in writ- ing) by the immediate supervisor ofthe individual making the assessment." This provision does not apply to additions to tax under section 6651 or to any "penalty - 8 - automatically calculated through electronic means." Sec

The evident reason for adding - 82 - "and penalties assessed" is that, unlike income and estate taxes, some penalties-- the "assessable penalties" ofsections 6671 through 6725--are not subject to deficiency notice procedures.6 I understand the effective date provision for section 6751 to apply to a penalty that is subject to notice ofdeficiency procedures ifthe notice was issued after the effective date and to apply to assessable penalties ifthey are assessed after the effective date.

6751(b). R contends that I.R.C. sec. 6751(b) does not apply in deficiency proceedings or, alternatively, that R satisfied the procedural requirements ofI.R.C.

Becker's fraud is evident, we hold that he and Ms.

Becker's fraud is evident, we hold that he and Ms.

The cases were consolidated, and a two-week trial was held in early 2017. On December 20, 2017, the Court issued an Opinion in Graev v. Commissioner (Graev III), 149 T.C. __ (Dec. 20, 2017), supplementing 147 T.C. 460 (2016). In Graev III, 149 T.C. at __ (slip op. at 14), we held that in cases in which the Commissioner bears the burden ofproduction with respect to penalties under section 7491(c), the burden ofproduction includes evidence ofwritten supervisory approval ofpenalties as required by

Becker's fraud is evident, we hold that he and Ms.

Becker's fraud is evident, we hold that he and Ms.

Becker's fraud is evident, we hold that he and Ms.

The cases were consolidated, and a two-week trial was held in early 2017. On December 20, 2017, the Court issued an Opinion in Graev v. Commissioner (Graev III), 149 T.C. __ (Dec. 20, 2017), supplementing 147 T.C. 460 (2016). In Graev III, 149 T.C. at __ (slip op. at 14), we held that in cases in which the Commissioner bears the burden ofproduction with respect to penalties under section 7491(c), the burden ofproduction includes evidence ofwritten supervisory approval ofpenalties as required by

Ohendalski stated that pursuant to section 6751(b), a supervisor's approval was required for the assessment ofthe section 6652 delinquency penalty and that none had been obtained.

6751 provides : SEC .

ation’s income tax is substantial if it exceeds the lesser of $10 million or “10 percent of the tax required to be shown on the return * * * (or, if greater, $10,000).” Sec. 6662(d)(1)(B). We must also consider whether the Commissioner complied with section 6751. That section states that no penalty is allowed unless the “initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination.” Sec. 6751(b)(1). This writ

ation’s income tax is substantial if it exceeds the lesser of $10 million or “10 percent of the tax required to be shown on the return * * * (or, if greater, $10,000).” Sec. 6662(d)(1)(B). We must also consider whether the Commissioner complied with section 6751. That section states that no penalty is allowed unless the “initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination.” Sec. 6751(b)(1). This writ

Section 6662(b)(1) and (2) Penalties That leaves us to decide only the merits of the penalty determinations that managed to trickle through section 6751’s procedural protection.

Section 6662(b)(1) and (2) Penalties That leaves us to decide only the merits of the penalty determinations that managed to trickle through section 6751’s procedural protection.

Section 6662(b)(1) and (2) Penalties That leaves us to decide only the merits of the penalty determinations that managed to trickle through section 6751’s procedural protection.

Section 6662(b)(1) and (2) Penalties That leaves us to decide only the merits of the penalty determinations that managed to trickle through section 6751’s procedural protection.

On September 17, 2020, he filed an Amended Petition alleging that the exaction imposed by sec- tion 4973 is a “penalty” within the meaning of section 6751. He assigned error to the 2004–2014 excise tax deficiency determinations on the the- ory that the IRS was required to obtain, but allegedly failed to secure, supervisory approval for “the initial determination of such assessment.” See § 6751(b)(1). On October 19, 2020, respondent filed an Answer to the Amended Petition, denying petitioner’s al

y underpayment of tax required to be shown on a return that is due to “[a]ny substantial understatement of income tax.” The Commissioner has both a burden of proof and a burden of production here. His burden of proof is to show that he complied with section 6751. On August 3, 2018, Revenue Agent Van Nguyen finalized a substantial- understatement penalty lead sheet. Group Manager Ted Spencer signed it on August 6, 2018 and the IRS mailed a Letter 950 that listed all of the penalties at issue, inc

he Featherses’ return is about $212,278, and the Featherses reported no liability on their return—this difference is much greater than the 10 percent the Commissioner needs to satisfy this burden. His burden of proof is to show that he complied with section 6751. A group manager approved in writing the determination by Revenue Agent Thien Tran—the first revenue agent to work on the audit—to impose an accuracy-related penalty on the ground of substantial understatement of income tax on December 1

.172-1(c), which means that we find that they failed to substantiate their NOL deduction. V. Accuracy Related Penalty The Commissioner has both a burden of proof and a burden of production here. His burden of proof is to show that he complied with section 6751. There is no doubt that he did. Group Manager Patrick Lunny approved in writing Revenue Agent Steven Dake’s determination to assert accuracy-related penalties on the ground of substantial understatement of income tax or negligence on April

nstrates that the Commissioner automatically calculated the section 6662 penalty asserted against Ms. Roman through electronic means, and Ms. Roman has not offered any contrary arguments or evidence. Therefore, no written approval was required under section 6751. Accordingly, unless Ms. Roman’s underpayment of tax was attributable to reasonable cause and good faith, she is liable for the penalty. See I.R.C. § 6664(c)(1). 22 [*22] B. Reasonable Cause and Good Faith No penalty is imposed under sec

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

This conclusion is consistent with the IRS' interpretation ofits obligations under section 6751, as set forth in the IRM.6 The IRM explains that the agency's general practice is to require written approval ofall penalties by the immediate supervisor ofthe examiner proposing the penalty, while noting that penalties automatically calculated through electronic means are excluded from this require- ment.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

rtion. Secs. 3101, 3102(a), 3111. - 8 - [*8] Commissioner asserted that Povolny and PG owed accuracy-relatedpenalties, and Povolny contested them in the petitions. The Commissioner, however, introduced no evidence at trial that he had complied with section 6751. See Graev v. Commissioner (Graev III), 149 T.C. __, __ (slip. op. at 13-15) (Dec. 20, 2017) (citing Chai v. Commissioner, 851 F.3d 190, 221 (2d Cir. 2017), aff'g in part, rev'g in part T.C. Memo. 2015-42), supplementing 147 T.C. __ (Nov.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

rtion. Secs. 3101, 3102(a), 3111. - 8 - [*8] Commissioner asserted that Povolny and PG owed accuracy-relatedpenalties, and Povolny contested them in the petitions. The Commissioner, however, introduced no evidence at trial that he had complied with section 6751. See Graev v. Commissioner (Graev III), 149 T.C. __, __ (slip. op. at 13-15) (Dec. 20, 2017) (citing Chai v. Commissioner, 851 F.3d 190, 221 (2d Cir. 2017), aff'g in part, rev'g in part T.C. Memo. 2015-42), supplementing 147 T.C. __ (Nov.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

rtion. Secs. 3101, 3102(a), 3111. - 8 - [*8] Commissioner asserted that Povolny and PG owed accuracy-relatedpenalties, and Povolny contested them in the petitions. The Commissioner, however, introduced no evidence at trial that he had complied with section 6751. See Graev v. Commissioner (Graev III), 149 T.C. __, __ (slip. op. at 13-15) (Dec. 20, 2017) (citing Chai v. Commissioner, 851 F.3d 190, 221 (2d Cir. 2017), aff'g in part, rev'g in part T.C. Memo. 2015-42), supplementing 147 T.C. __ (Nov.

Respondent’s counsel instructed Appeals to verify the validity of the assessments by ensuring that the Notice of Deficiency was sent to petitioner’s last known address by certified mail and verifying that the section 6751 supervisory approval requirement was met with respect to the civil fraud penalties.

As an initial matter, we note that we previously granted the Commissioner’s motion for partial summary judgment and found that he “established compliance with section 6751” as it relates to these penalties.

Section 6330(c)(2)(B) permits taxpayers to challenge the existence or amount of their 5 There is a section 6751 issue in dispute that the parties did not address in their Motions for Partial Summary Judgment.

By Order dated September 22, 2023, we ruled that the IRS complied with the supervisory approval requirement of section 6751 with respect to the penalties at issue, granting respondent’s Motion for Partial Summary Judgment on the issue.

10 [*10] under section 6751 and challenge the penalties only on the basis of their reasonable cause defense.

We held that respondent failed to meet the burden of production with respect to the written supervisory approval requirement of section 6751 and that petitioner was therefore not liable for the civil fraud penalty for 2001.

quent tax debt’ because section 6038 penalties are not summarily assessable penalties”;10 3. “Petitioner did not have a legally enforceable Federal tax liability because [the Commissioner] did not satisfy his supervisorial approval requirement under section 6751”; 4. “[The Commissioner’s] tax lien was improper because the conditions precedent for a Federal tax lien [filing] were not satisfied”; or 5. “There was no legally enforceable Federal tax liability because the statute of limitations to as

and Dr. Righetti retained the services of the Kaufman firm to prepare their 1999 and 2000 tax returns, those are not the years at 9 Ms. Amos has not raised the issue of whether the Commissioner complied with the supervisory approval requirements of section 6751. In any event, the record establishes that the revenue agent received written supervisory approval on July 5, 2017. As assessment has not yet occurred, see § 6215(a), the IRS has plainly satisfied the section 6751 requirement as interpre

As a result, the Service is not required to verify compliance with IRC § 6751.” Warner timely petitioned the Tax Court alleging that the Commissioner erred by precluding Warner from “rais[ing] noncompliance with section 6751(b) as an issue.” Warner argues that the settlement officer was required to verify that the IRS had complied with section 6751(b).

(1984), aff’d, 772 F.2d 910 (9th Cir. 1985). This means we can move on to redetermine the amounts of the deficiencies.17 17 We do note that the Commissioner showed written supervisory approval of the fraud penalty against Mr. Gentry as required by section 6751. The Commissioner asserted only a section 6651 fraudulent failure-to-file penalty against Mr. Jenkins, so section 6751(b)(2)(A) by its plain language doesn’t apply to his case. See Beam v. Commissioner, T.C. Memo. 2017-200, at *14. - 20 -

(1984), aff’d, 772 F.2d 910 (9th Cir. 1985). This means we can move on to redetermine the amounts of the deficiencies.17 17 We do note that the Commissioner showed written supervisory approval of the fraud penalty against Mr. Gentry as required by section 6751. The Commissioner asserted only a section 6651 fraudulent failure-to-file penalty against Mr. Jenkins, so section 6751(b)(2)(A) by its plain language doesn’t apply to his case. See Beam v. Commissioner, T.C. Memo. 2017-200, at *14. - 20 -

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

insurer commonly would. III. Penalties Our last issue is whether any of this justifies accuracy-related penalties under section 6662(a). We now know that if the Commissioner wants penalties, he himself must have laid the foundation by complying with section 6751. The parties have settled this issue here with a stipulation that the Commissioner complied with section 6751(b) in only seven of these cases. With that in place, we can put up a framework for the merits. Section 6662(a) imposes a 20% pe

d that proper assessments had been made, and a notice properly sent, for 2012 through 2014. 7Respondent has conceded the sec. 6662(a) penalties based on the settlement officer's failure to properly verify that the supervisory approval requirements ofsec. 6751 had been satisfied. -14- [*14] She reviewed examination files and the notice ofdeficiency relating to these years as well as the certified mailing list showing the mailing ofthe notice and the United States Postal Service tracking results f

He also failed, however, to show compliance with section 6751 for these penalties.

and not willful neglect. See sec. 6651(a)(1) and (2). Willful neglect is defined as "a conscious, intentional failure or reckless indifference." United States v. Boyle, 469 U.S. 241, 245 (1985). 49Additions to tax under sec. 6651 are not subject to sec. 6751, under sec. 6751(b)(2)(A). - 71 - Petitioners argue that their failures to file and pay were not due to willful neglect, and respondent has not contested that point. We therefore deem respondent to have conceded that petitioners' failures t

He also failed, however, to show compliance with section 6751 for these penalties.

and not willful neglect. See sec. 6651(a)(1) and (2). Willful neglect is defined as "a conscious, intentional failure or reckless indifference." United States v. Boyle, 469 U.S. 241, 245 (1985). 49Additions to tax under sec. 6651 are not subject to sec. 6751, under sec. 6751(b)(2)(A). - 71 - Petitioners argue that their failures to file and pay were not due to willful neglect, and respondent has not contested that point. We therefore deem respondent to have conceded that petitioners' failures t

He also failed, however, to show compliance with section 6751 for these penalties.

He also failed, however, to show compliance with section 6751 for these penalties.

The notices of deficiency contained information about the section 6651 and 6654 additions to tax that satisfy the requirements of section 6751 .5 Moreover, as previously discussed, we have concluded that petitioner received the notices of deficiency, is precluded from challenging his underlying liability in this proceeding, and in fact has never raised any cognizable challenge to his underlying tax liability .