Timeliness of Accelerated International Penalty Review Being Monitored By IRS

December 01, 2010, 07:25 PM

On November 3, 2010, the IRS Appeals division assigned an international specialist coordinator to monitor and ensure that the IRS is meeting the new one hundred twenty (120) day accelerated review that is available to the qualified post-assessment, prepayment international penalties. Assigning the coordinator complements the IRS’s recent publication of guidelines for a taxpayer’s right to appeal assessed international penalties. In order to receive the accelerated review, the taxpayer must qualify as a Category 1 taxpayer defined as either 1) a taxpayer whose assets total $100 million or more or 2) a taxpayer that is specifically designated as Category 1 by the IRS. The IRS Appeals deputy chief stated that Category 1 designation must be in the best interest of tax administration and only used sparingly. If eligible, the taxpayer may elect (but is not required) to receive accelerated review through the filing of a protest. Once a protest is filed, collection activity is suspended during the Appeals review. If unsuccessful in the review, the taxpayer will not be allowed to contest the penalty a second time. If the taxpayer chooses to not elect accelerated review, the standard claims procedures remain available but without the 120-day turnaround. This new program should hopefully reduce the burden on taxpayers significantly. – Elaina L. Blanks