Wiggling off the hook for tax penalty — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Wiggling off the hook for tax penalty

Get PDF file

by on
in Small Business Tax

Can you avoid tax penalties if you rely on advice from a professional? It depends on the particular facts and circumstances. In a new case, a retiring tugboat captain met with financial planners who convinced him to enter into a complex deal to sell his business.

The upshot: He would owe zero tax on the transaction. After his long-time attorney gave the stamp of approval, the captain went ahead with the deal. But then the IRS audited the captain and said he owed tax on $5 million of gain. Now the Tax Court has agreed with the IRS, but there’s some consolation for the captain: He doesn’t owe the 40% gross valuation penalty because he relied on professional advice. (Bruce, TC Memo 2014-78)

Related Articles...

Leave a Comment

Previous post:

Next post: