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Tax Notes Today Quotes Zhanna Ziering on Reasonable Cause Relief at 2016 ABA Midyear Meeting

February 2, 2016, Tax Notes Today

During the American Bar Association's 2016 Midyear Meeting, Caplin & Drysdale's Zhanna A. Ziering commented on reasonable cause relief when filing taxes on international transactions. For the complete article, please visit Tax Notes Today's website (subscription required).

Excerpt taken from the article "ABA Meeting: Practitioners Assail Reasonable Cause Standard For Penalties" by Andrew Velarde for Tax Notes Today.

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Given the language in the IRM, Zhanna A. Ziering of Caplin & Drysdale Chtd. questioned whether international filers would have to obtain a second expert opinion to acquire reasonable cause relief. 

Section 6038D(g), on information returns of foreign financial assets, provides that a foreign jurisdiction's imposition of a civil or criminal penalty on the taxpayer for disclosing the required information is not reasonable cause.

"You have an element in that particular statute that is making a heightened reasonable cause," said Peter Reilly, special counsel, IRS Office of Associate Chief Counsel (Procedure and Administration).

Ziering pressed Reilly about what the IRS expects of taxpayers if assembling information and consulting a CPA are not enough to build a reasonable cause case.

"When in doubt, file the form," Reilly said. "That's prophylactic."

Ziering asked Reilly to comment on cases in which taxpayers didn't know about the form. Reilly responded that by now, there should be heightened awareness in the accounting community about international information returns that require practitioners to examine the issues "a little bit harder than you would in an estate tax situation."

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