IRS Commissioner to Answer to Ways & Means on IRS Backdating Forms

By Christi Mondrik, J.D., CPA-Austin

 

The House Ways and Means Committee Chair Jason Smith, and Oversight Subcommittee Chair David Schweikert issued a letter to IRS Commissioner Daniel Werfel on Feb. 27, 2024, questioning the IRS’ response to the U.S. Tax Court’s decision in LakePoint Land II LLC v. Comm’r, T.C. Memo 2023-111, (Aug. 29, 2023). In its decision, the tax court sanctioned IRS counsel for failing to alert the court it had backdated penalty approval documents asserting penalties – a penalty lead sheet – against a partnership in a conservation easement. The court found it had relied upon a false declaration and a backdated document when it discovered different versions of a lead sheet, one of which was signed in February 2017 but backdated to July 2016. The court found the actions of the revenue agent and respondent’s counsel “to be in bad faith and to have multiplied the proceedings in this case unreasonably and vexatiously.” The court imposed sanctions against the IRS but declined to award costs and fees to the petitioner.

 

IRS Satisfies Penalty Approval Requirement in Easement Case | Tax Notes

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