Penalties Under the Code
Tax Opinions / Full Tax Court Opinions / Penalties Under the Code

Thompson v. Commissioner
155 T.C. No. 5

On August 27, 2020, the Tax Court issued its opinion in Thompson v. Commissioner (155 T.C. No. 5). The primary issue presented in Thompson v. Commissioner was whether the offer of settlement of the petitioners’ tax liabilities under reduced penalty rates on any later-determined underpayment arising out of an abusive tax transaction was an “initial determination” of a penalty for purposes of IRC § 6751(b)(1)’s prior written supervisory approval requirement. Background to Thompson v. Commissioner The petitioners engaged in an abusive transaction known as a distressed asset trust transaction, which they reported on their 2005 return. The IRS audited multiple years including 2005. In 2007, the IRS mailed a letter to the petitioners which stated that the IRS was aware that the petitioners participated in an abusive transaction and offered them the opportunity to resolve their tax liabilities associated with that transaction in accordance with the terms set forth in Announcement…

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August 27, 2020
Procedural Issues
Tax Opinions / Full Tax Court Opinions / Procedural Issues

Van Bemmelen v. Commissioner
155 T.C. No. 4

On August 27, 2020, the Tax Court issued its opinion in Van Bemmelen v. Commissioner(155 T.C. No. 4). The primary issue presented in Van Bemmelen v. Commissioner was whether the administrative record could be supplemented with evidence not considered by the IRS’s Whistleblower Office when it rejected the petitioner’s claim. Background to Van Bemmelen v. Commissioner In 2018, the petitioner submitted a Form 211 to the IRS’s Whistleblower Office (WBO). In this claim, the petitioner references an October 2012 submission regarding the same taxpayer. The claim alleged that a multinational insurance company had engaged in a tax evasion scheme in the amount of approximately $858 million. In a memorandum rejecting that the petitioner’s claims be rejected, the WBO stated that the allegations were not specific, credible, or were speculative in nature. The memorandum also stated that the information in the claim referenced the 2012 claim, which was likewise determined to lack…

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August 27, 2020