Taxpayers Waived Right to Challenge Penalties, Tax Court Rules

Taxpayers that declined a meeting with an IRS appeals office to dispute their $24.9 million penalties are barred from later challenging that liability in a collection due process, the US Tax Court ruled Monday.

James Haber and his corporation, Diversified Group Inc., had an opportunity to dispute the penalties when they received letters from the IRS authorizing a conference with the IRS Office of Appeals, the court ruled. Judge Emin Toro rejected their argument that the conference would have produced a “precooked result” and therefore been meaningless, saying that declining to participate in the conference “made it impossible for ...