Listed Transaction Penalty Upheld By Federal Circuit Court

Tax professionals are intimately familiar with certain reporting requirements under the Internal Revenue Code.  Indeed, a failure to properly and timely report a position on a return where it is otherwise required may result in significant penalties to a taxpayer.

One common failure-to-report penalty relates to so-called “listed transactions.”  Generally, these transactions must be reported on an IRS Form 8886, Reportable Transaction Disclosure Statement.  Any failure to report the transaction on a timely and properly filed Form 8886 can result in significant penalties—up to $200,000 per year.  See I.R.C. § 6707A.

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