Page 107 - TaxAdviser_2022

TAX TRENDS

as the person who supervised the agent’s individual making the penalty determina- often failed to obtain the required pen-
substantive examination work. That per- tion, not the person who supervises the alty approval from the right person at
son would presumably, besides the agent, conduct of an audit. The Tax Court found the right time, which has allowed many
have the most knowledge about the facts this reasoning flawed because Burris su- taxpayers to avoid paying well-deserved
and legal issues in the case, making him pervised all of Cooper’s work during the penalties. This has not gone unnoticed,
or her the best person to review whether a examination, so he necessarily supervised and the current administration is seeking
proposed penalty is justified. the individual making the determination. to solve this problem by eliminating the
Sand argued that for Sec. 6751(b) Finally, Sand argued that Wilson must supervisory approval requirement in a
purposes, the immediate supervisor is the have been Cooper’s immediate supervisor provision of the Build Back Better Act
direct superior, in a hierarchical sense, of because she asked him to sign the penalty (H.R. 5376). Whether this attempt will
the agent asserting the penalties. That approval form and he did sign it. The Tax be successful remains to be seen.
person, Sand contended, is the one who Court disagreed and refused to penalize Sand Investment Co., LLC, 157 T.C.
handles the agents’ work assignments, Cooper for doing more than the statute No. 11 (2021) ■
performance reviews, leave requests, and intended, stating that due to evolving
similar administrative tasks. The Tax judicial decisions of the ambiguous Sec.
Court rejected this argument because it 6751(b), “Cooper evidently took a belt- Contributor
reasoned this interpretation did not align and-suspenders approach” in having both
with the statutory context, which was supervisors sign the form. James A. Beavers, CPA, CGMA, J.D.,
penalty approval, or Congress’s intent LL.M., is The Tax Adviser’s tax techni-
behind the statute. Reflections cal content manager. For more infor-
Sand also observed that the statute Sec. 6751(b) should not be a terribly mation about this column, contact
identifies the immediate supervisor as hard statute for the IRS to comply with; thetaxadviser@aicpa.org.
being the person who supervises the however, in the past, IRS agents have

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