Tax News

CCH (cch.taxgroup.com) reports:

  The 40-percent gross valuation misstatement penalty, as well as the 20-percent substantial valuation misstatement penalty, asserted by the IRS in a Final Partnership Administrative Adjustment (FPAA), was inapplicable to a partnership because the underpayment of the partnership's taxes was not attributable to an overvaluation misstatement. Since the partnership conceded the correctness of the IRS's proposed capital gains adjustments under Code Sec. 465(b)(1) on grounds unrelated to an overstatement of basis or value, the overvaluation penalties under Code Sec. 6662 could not be imposed. The partnership's concession on the underlying tax issue obviated the need to conduct a trial on valuation issues, and therefore, achieved the very efficiencies and economies that the elimination of penalties sought to encourage.

  Related decision at 2008-2 USTC ¶50,534 and 2008-2 USTC ¶50,595.

Alpha I, L.P., FedCl, 2009-1 USTC ¶50,125

Other References:

 
Code Sec. 6662

  CCH Reference - 2009FED ¶39,654.20

  Tax Research Consultant

  CCH Reference - TRC PENALTY: 3,104.15
CCH Reference - TRC PENALTY: 3,110.25