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TAX TRENDS

Oosterwijks’ reasonable-cause claim. The and professionals-only availability of
court stated: e-filing.
A taxpayer cannot Second, the court found that the
A refund claim need not provide avoid the reach of limits in Brennan’s concurrence in Boyle
a perfectly detailed explanation of Sec. 6651(a)(1) on the bright-line rule of nondelegabil-
the taxpayer’s legal theory regard- ity did not apply. While the Oosterwijks
ing reasonable cause or develop a merely by claimed that e-filing’s limitation to pro-
complete factual background of delegating this fessional preparers and their inability to
the claim if it clearly states that confirm electronic transmission put the
the taxpayer seeks a refund for an duty to an attorney, filing out of their control, in his concur-
accountant, or other
improperly imposed penalty, calling rence in Boyle, Brennan indicated that
for investigation into whether there individual. the limits on the bright-line rule only
truly existed reasonable cause for a applied to taxpayers who are physically
late filing. [slip op. at 8] or mentally incapable of meeting a filing
duty to an attorney, accountant, or deadline. The Oosterwijks did not suffer
The court found that the Ooster- other individual” but stressed that the such disabilities, so the exception did not
wijks’ Form 843 was sufficient to “put “ordinary business care and prudence” apply to them.
the IRS on notice that the Oosterwijks standard applies only to the “ordinary Reasonable cause due to
alleged IRC § 6651(a) reasonable cause person.” Thus, the standard exempts erroneous advice: The Oosterwijks
for their failure to file and to allow the individuals with disabilities or infirmities asserted that if they had received cor-
IRS to focus its investigation” so that that render them physically or mentally rect advice from Paszkiewicz about the
the IRS should have discovered the incapable of knowing, remembering, and accrual of the late-filing penalty, they
Oosterwijks’ March 22, 2019, letter that complying with a filing deadline. would have filed their return in April
discussed reliance on erroneous advice The Oosterwijks argued that Boyle and avoided the late-filing penalty for
as one of the theories under which the does not apply to e-filing, because a May and June. Thus, they claimed they
couple claimed reasonable cause. taxpayer cannot personally confirm that had reasonable cause for their late return
Reasonable cause due to failure an accountant has e-filed as promised. filing for those two months based on
to e-file the extension: Under Regs. In their view, e-filing interposes a third Paszkiewicz’s erroneous advice.
Sec. 301.6651-1(c)(1), to demonstrate party between the taxpayer and the IRS, The IRS made two arguments in
reasonable cause, a taxpayer filing a and their inability to e-file on their own response to the Oosterwijks’ claim. First,
late return must show that he or she or to confirm an e-filing’s transmission the Service argued that because reason-
“exercised ordinary business care and put the filing beyond their control, mak- able cause is a one-time test evaluated
prudence and was nevertheless unable ing them incapable of complying with at the due date of the return, the failure-
to file the return within the prescribed the filing deadline under the criteria in to-file penalty was not divisible. Second,
time.” The Supreme Court has held that Brennan’s Boyle concurrence. even if a reasonable-cause exception
to escape the failure-to-file penalty, a The court concluded that Boyle did could be reevaluated after the return due
taxpayer must prove both that the failure apply to the Oosterwijks and the couple date, the exception did not apply in the
did not result from willful neglect and did not have reasonable cause for filing Oosterwijks’ case because Paszkiewicz’s
that the failure was due to reasonable their extension request late after relying advice contradicted the Form 4868
cause (Boyle, 469 U.S. 241 (1985)). The on Paszkiewicz to file it for them. First, instructions that a taxpayer must file the
Supreme Court also drew “as ‘bright’ a it noted that the same method of filing form by the regular due date of the tax-
line as can be drawn” that the taxpayer available to taxpayers at the time of the payer’s return. Thus, the advice was not
has an “unambiguous, precisely defined Boyle case, paper filing, was available to based on a “reasonable factual or legal
duty to file,” and the expectation that a the Oosterwijks, who had been free to assumption,” and the Oosterwijks would
third-party agent will file on the taxpay- paper file their extension request rather have acted unreasonably in relying on it.
er’s behalf does not relieve the taxpayer than have Paszkiewicz e-file it, even if Regarding divisibility, the court
of that duty. the IRS encourages e-filing — and, in found that while the penalty could in
In his concurring opinion in Boyle, fact, they did eventually file their exten- some circumstances be divisible for
Justice William Brennan stated that sion request on paper. Thus, they could reasonable-cause purposes, because
“a taxpayer cannot avoid the reach of have avoided any barrier they claimed the reasonable-cause exception is de-
§ 6651(a)(1) merely by delegating this was presented by specialized technology termined based on the facts as of the

46 April 2022 The Tax Adviser