Question

5. What must a taxpayer prove to establish the defense of shift of responsibility for purposes of I.R.C. $6662?

Answer 1

Internal Revenue Code $ 6662 imposes Responsibilities & accuracy-related penalty on taxpayers when there is underpayment of tax

The IRS must first present sufficient evidence to establish that the responsibility & penalty is warranted. The burden of proof then shifts to the taxpayer to establish any exception to the penalty.

Therefore , Taxpayer must prove that

He acted with “reasonable cause and in good faith”. A “reasonable cause” determination takes into account all of the pertinent facts and circumstances. The most important factor is the extent to which the he made an effort to determine the proper tax liability.

He or she had substantial authority for the position taken; if he disclosed the relevant facts on a return or on a statement attached to the return, and had reasonable basis for tax treatment of the item.

Administrative waivers - An administrative waiver grants automatic penalty relief in designated circumstances. Examples of criteria for administrative waivers are an IRS delay in printing or mailing tax forms or publishing necessary guidance.

There is an error on side of IRS & it should be Correct