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Caroline D. Ciraolo Quoted In Tax Notes Article Entitled “Practitioners Fear Pandemic’s Impact on Voluntary Disclosures”

Caroline D. Ciraolo was quoted in a recent Tax Notes article entitled “Practitioners Fear Pandemic’s Impact on Voluntary Disclosures,” published on March 25, 2021. The article focuses on discussion from a recent panel hosted by the District of Columbia Bar Taxation Community entitled “IRS Undeterred: An Update on Criminal Tax Enforcement” (March 24, 2021). Ciraolo weighs in on the COVID-19 pandemic’s effect on the processing of voluntary disclosure pre-clearance requests and the impact of subsequent triggering events.

The article notes:

Caroline D. Ciraolo of Kostelanetz & Fink LLP said she has experienced some delays in hearing back from CI on whether a client’s pre-clearance has been accepted or declined. While the longer processing time is understandable in light of the pandemic, there are concerns about CI’s inability to review forms as soon as they’re submitted, she said.

“We’ve always presumed that when you ring the bell — when you fax in your pre-clearance request — that is the moment at which you have arrived at the IRS,” Ciraolo said. “And anything the IRS develops after that moment your fax transmission is in will not be used to determine the declination of pre-clearance.”

However, given the COVID-related delays, “I’m not so sure that’s the case right now,” Ciraolo continued. “I hope it remains that the minute your fax arrives, that’s when your pre-clearance determination is done. But if someone doesn’t pick up that fax for a week or two and something develops in that period between the arrival of the fax and someone looking at it, I think there’s some daylight there.”

Jeffrey A. Neiman of Marcus Neiman & Rashbaum LLP said that if an intervening event were to arise and cause a pre-clearance request to be denied, “I would think the policy considerations here to honor the program would be met appropriately.”

“I think that’s right,” said Ciraolo. “It’s just a timing issue, so it’s a matter of making sure everyone’s on the same page.”


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