Opinion
1289-21S
10-12-2021
Stephen S. Adams & Victoria L. Adams Petitioners v. Commissioner of Internal Revenue Respondent
ORDER
Elizabeth Crewson Paris, Judge
This case is calendared for trial at the February 7, 2022, Oklahoma City, Oklahoma remote proceedings Trial Session of the Court. Petitioner(s) filed a petition for review of a notice of deficiency in which respondent asserted an accuracy-related penalty under section 6662(a) for taxable year 2017.
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 petitioner(s) 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 deficiency 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, if the parties do not submit a proposed decision document which states there is not any section 6662(a) penalty due from petitioner(s) for the year in issue before November 30, 2021, then on or before November 30, 2021, 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).