Procedurally Taxing: In Wells Fargo 8th Circuit Holds Reasonable Basis Defense to Negligence Penalty Requires Taxpayers Prove Actual Reliance on Authorities (Apr. 27, 2020)

Professor Leslie Book, on his Procedurally Taxing blog, reports on Wells Fargo v. US, which holds that the reasonable basis defense to the negligence penalty requires a taxpayer to prove that they actually relied on relevant legal authority rather than just show that objectively the authority supported the taxpayer’s position. Wells Fargo is the first appellate opinion to hold that reasonable basis for penalty defense purposes is based on a subjective rather than objective standard. The earlier district court opinion had attracted significant interest, and as Professor Book discusses in his article, the court’s holding may force taxpayers to waive attorney client privilege if they want to use the defense to the negligence penalty.

To see full article, click: In Wells Fargo 8th Circuit Holds Reasonable Basis Defense to Negligence Penalty Requires Taxpayers Prove Actual Reliance on Authorities

To see Wells Fargo v. US, No. 17-3578 (Apr. 24, 2020), click here.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..

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