CCA 201348015: Counsel discusses the limitations period for section 6702 penalties

Plain-English summary

Chief Counsel attorneys discussed whether a statute of limitations applies to assessments of penalties under IRC § 6702 for frivolous submissions. The message says the IRS argued in briefs that no limitations period applies when taxpayers raised the issue as a bar to assessment. It notes that the Tax Court did not need to decide the issue in the cited cases. The attorneys preferred to avoid the issue by assessing a penalty within three years of a frivolous submission when possible.

Ruling snapshot

• Question: Does a statute of limitations bar assessment of an IRC § 6702 penalty?
• Outcome: advice given
• Key authorities: IRC §§ 6501 and 6702; Crites v. Commissioner, T.C. Memo. 2012-267; O'Brien v. Commissioner, T.C. Memo. 2012-326

Full text (IRS public release)

ID:      CCA_2013091913550728                        Third Party Communication: None

UILC:    6702.00-00, 6501.00-00                      Date of Communication: Not Applicable

Number: 201348015
Release Date: 11/29/2013
From:
Sent: Thursday, September 19, 2013 1:55:07 PM
To:
Cc:
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Subject: RE: statute of limitations on assessment of section 6702 penalty


We made the argument that no SOL applies in briefs submitted in a couple of cases where taxpayers
raised the SOL as a bar to assessment of the penalty. The Tax Court did not need to decide the
issue. Crites v. Commissioner, T.C. Memo. 2012-267 and O’Brien, T.C. Memo. 2012-326 have a little
discussion of what we argued.

Obviously, we don’t want to get into this situation if we can make an assessment w/i three years
of a frivolous submission.