Penalty Abated

[jainen]

TC Memo 2011-50

Taxpayers gave money to sister to invest, but the stocks eventually became worthless. They took the loss against gain from IBM employee stock options. Court agreed with IRS that they can't do that -- they couldn't prove ownership, and anyway the options were ordinary income. Fair enough, but what about the 20% accuracy penalty? Taxpayers brought in the IRS pubs about capital gains and options and so on, and asked the judge to figure it out. No penalty.

[Margaret CPA in OH]

Like many others, I think our tax code would be soooooo much simpler if the legislators were required to complete their own tax returns. Then again, it's a measure of job security of sorts for some of us, I guess.

[mcb39]

TC Memo 2011-50

Taxpayers gave money to sister to invest, but the stocks eventually became worthless. They took the loss against gain from IBM employee stock options. Court agreed with IRS that they can't do that -- they couldn't prove ownership, and anyway the options were ordinary income. Fair enough, but what about the 20% accuracy penalty? Taxpayers brought in the IRS pubs about capital gains and options and so on, and asked the judge to figure it out. No penalty.

Unfortunately, my long-fought request for Innocent Spouse Relief for the 2008 client that I have spoken about often on this board; has been preliminarily denied. Along with the $1800 penalty that goes along with it.