Ezel / IRS Rulings / 201804008
Chief Counsel Advice 201804008 Released January 26, 2018 Advice

Return preparer must meet section 6694 refund-suit deadlines or fully pay the penalty

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This page covers one taxpayer's ruling from 2018, which can't be cited as precedent. Ezel answers your situation under the current Code and IRS guidance, with citations.

Currency note: this determination was released in 2018
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, 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

A return preparer sought to challenge a section 6694 penalty without first paying the full amount. Chief Counsel advised that the Flora full-payment rule applies if the preparer does not timely use the special refund-suit procedure in section 6694(c). The email states that the preparer must file suit within the applicable 30-day and six-month periods tied to the refund claim. If those deadlines are missed, the preparer must fully pay the penalty before a court has jurisdiction over the refund claim. The Procedure and Administration office agreed with the advice.

Ruling snapshot

  • Question: Must a return preparer fully pay a section 6694 penalty if the preparer misses the special deadlines for bringing a refund suit?
  • Outcome: advice given, full payment is required after the deadlines are missed
  • Key authorities: IRC § 6694(c); Flora full-payment rule; Bailey v. United States; Taylor v. Washington

Full text (IRS public release)

ID:          CCA_2018010309181453
UILC:        6694.00-00

Number: 201804008
Release Date: 1/26/2018
From:
Sent: Wednesday, January 03, 2018 9:18:14 AM
To:
Cc:
Bcc:
Subject: RE: CF # 6467185


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Unfortunately the Flora rule applies where a preparer doesn’t file suit within 30 days/6
months of filing the refund claim (using the 6694(c) exception). See Bailey v. United
States, 2016 WL 7743404 (D. Ariz. 2016); Taylor v. Washington, 118 A.F.T.R. 2d 2016-
5531 (E.D. Wash. Aug. 1, 2016). Thus, the preparer will need to file suit within 30-days
and 6 months of filing the refund claim. Otherwise, the preparer will have to full-pay the
penalty in order for the court to have jurisdiction over the claim. PA agrees with this
advice.

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