Opinion
6202-21S
12-30-2021
Mustafa Guhat Adam & Mary Hassan, Petitioners v. Commissioner of Internal Revenue, Respondent
ORDER
Eunkyong Choi Special Trial Judge
This case is calendared for trial at the February 28, 2022, Seattle, Washington, Trial Session of the Court.
On February 19, 2021, petitioners filed a petition for review of a notice of deficiency for tax year 2017 in which respondent asserted an accuracy-related penalty under section 6662(a). On June 29, 2021, respondent filed the Answer in this case. Upon further review of the record, it appears a complete copy of the notice of deficiency issued to petitioners for tax year 2017 was not attached to the petition or the answer.
Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended, in effect for the year at issue.
Respondent cannot assess an accuracy-related penalty under section 6662(a) unless he has complied with the requirement of section 6751(b)(1), which provides:
No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the
immediate supervisor of the individual making such determination or such higher level as the Secretary may designate.
To show compliance with this provision, respondent must show (1) the identity of the individual who made the "initial determination", (2) an approval of the penalty "in writing", (3) the identity of the person giving approval and his or her status as the "immediate supervisor", and (4) evidence that the supervisory approval was obtained no later than the issuance to petitioners of the initial formal communication of proposed adjustments that includes penalties and provides the taxpayer the right to protest those proposed adjustments, such as a 30-day letter or Letter 525. See sec. 6751(b)(1); Clay v. Commissioner, 152 T.C. 223, 249 (2019).
If respondent wishes to continue to assert the accuracy-related penalty under section 6662(a) in this case, he shall file a status report and attach thereto any relevant documents to demonstrate compliance with section 6751(b)(1). Alternatively, if respondent concludes that he did not comply with the requirement under section 6751(b)(1) with respect to the accuracy-related penalty under section 6662(a), he should consider conceding that penalty and notify the Court by filing a status report. Upon due consideration, it is
ORDERED that, on or before January 19, 2022, respondent shall file a response to this Order attaching thereto the Notice of Deficiency issued to petitioners for tax year 2017. It is further
ORDERED that, if the parties do not submit a proposed decision document which states there is not any section 6662(a) penalty due from petitioners for the year[s] in issue before January 24, 2022, then on or before January 24, 2022, respondent shall file a status report attaching thereto any relevant documents to demonstrate compliance with section 6751(b)(1) or notifying the Court whether he concedes the accuracy-related penalty under section 6662(a).