U.S. Appeals Court Affirms IRS Authority to Assess Penalties for Unreported Foreign Business Control

The U.S. Court of Appeals for the Second Circuit affirmed that the IRS can assess penalties under IRC §6038(b) for failure to report control of a foreign business, vacating and remanding the Tax Court’s decision. The taxpayer, an individual, allegedly failed to report control of a foreign business for the relevant tax years, resulting in tax penalties under §6038(b). When the taxpayer did not pay, the IRS filed a tax lien, which the taxpayer challenged unsuccessfully in a Collection Due Process hearing before petitioning the Tax Court. The Tax Court granted summary judgment to Taxpayer, holding that the IRS lacked ...