412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.
Friday, June 28, 2013
Monday, June 17, 2013
SBCA CALLS FOR AN IMMEDIATE MORATORIUM ON TAX CODE SECTION 6707A LISTED TRANSACTION PENALTIES
SBCA CALLS FOR AN IMMEDIATE MORATORIUM ON TAX CODE SECTION 6707A LISTED TRANSACTION PENALTIES |
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The Small Business Council of America calls for Congress to place an immediate moratorium on the assessment and collection of the IRC Section 6707A penalty until the statute can be thoroughly reviewed and recommendations can be made to carry out the intention of Congress without the disproportionate and probable unconstitutional impact of current law on small businesses and their owners.
The National Taxpayer Advocate 2008 Annual Report to Congress, page 421, states:
"Notwithstanding the underlying congressional intent in enacting Section 6707A, the statute as written can impose unconscionable hardship on taxpayers. Even the penalty for proven cases of civil fraud is capped at 75 percent of the tax underpayment. Yet this statute allows penalties of up to $300,000 per year to be imposed on taxpayers with no underpayment of tax and no knowledge that they entered into transactions that the IRS has “listed.”
It is rare that a tax provision is found to violate the United States Constitution, but we believe the imposition of such a large penalty on a taxpayer who entered into a transaction that produced little or even no tax savings and without regard to the taxpayer’s knowledge or intent raises significant constitutional concerns, including possible violation of the Eighth Amendment’s prohibition against excessive government fines and due process protections. In practice, the requirement that this penalty be imposed without regard to culpability may have the effect of bankrupting middle class families who had
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