Reportable transaction penalties after a taxpayer’s death

Number

201039028

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Reportable Transaction Penalties

Topics

Procedure, penalties, and administration

Code sections

§ 6662A, § 6700, § 6701, § 6707A

Ruling dated

August 27, 2010

Publicly released

October 1, 2010

Source

View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.

About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.

View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice addresses penalties under IRC §§ 6707A and 6662A after a taxpayer’s death. The advice concludes that the § 6707A penalty is not joint and several liability of both spouses unless both participated in the reportable transaction. On the stated facts, the § 6707A penalty would be assessed against the deceased husband’s estate. The § 6662A addition to tax is joint and several liability of the deceased husband and spouse and applies to the relevant understatement.

Ruling snapshot

Question: How do §§ 6707A and 6662A apply to spouses when one spouse has died?
Outcome: Advice given
Key authorities: IRC §§ 6662A, 6700, 6701, and 6707A; Reiserer v. United States, 479 F.3d 1160 (2007)

Full text (IRS public release)

ID: CCA_2010082715583366 Number: 201039028
Release Date: 10/1/2010
Office: ----------
UILC: 6707A.00-00, 6662A.00-00

From: -------------------------
Sent: Friday, August 27, 2010 3:58:36 PM
To: ---------------
Cc:
Subject: RE: Update regarding 6707A Penalty Application

--------

Sorry for the delayed response. --------------------------------------------------- has looked into your questions regarding the application of section 6707A and 6662A to the facts you presented. Based on those facts, we agree that the current position is that the 6707A penalty is not a joint and several liability of the husband and wife unless both spouses engaged/participated in the reportable transaction. Under the facts presented, the 6707A penalty would be assessed against the deceased husband's estate. This would be consistent with the treatment of other similar penalties assessed against a deceased taxpayer. For example, penalties under section 6700/6701 have been assessed against a deceased promoter's estate. See Reiserer v U.S. 479 F.3d 1160 (2007). The section 6662A addition to tax is a joint and several liability (like the tax liability reported on the return and any additional tax, penalties, additions to tax, and interest) of the deceased husband and spouse. It applies to any understatement with respect to a reportable transaction and is not limited to the deceased husband.

If you have any further questions on this matter, please feel free to contact me.

Thanks.

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

Checks the law as it stands today, not only this page
Cites every source it relies on, so you can verify it
Chat, drafting and research in one workspace