The Diversified Group Inc. is asking the U.S. Tax Court to find that it didn’t have a prior opportunity to dispute a $29 million reportable transaction penalty because the case involved a coordinated issue, which IRS Appeals officers have no authority to settle.
No Prior Opportunity Offered
In its petition, Diversified says the IRS didn’t send it any correspondence constituting an “offer” to dispute the liability within the meaning of Treas. reg. section 301.6330-1(e)(3).
The company also contends that taxpayers shouldn’t be deemed to have been offered an opportunity when they’ve explicitly waived such opportunities in advance.
Diversified’s argument that it waived its right to a prior administrative opportunity is an interesting one, said Lawrence A. Sannicandro of McCarter & English LLP. But the company may have a tough time convincing the Tax Court that the Our Country Home line of cases shouldn’t be followed, he said.