Caroline D. Ciraolo was quoted in a Tax Notes article titled “IRS Penalty Practice May Be Due for Reset,” published on August 16, 2023. The article addresses the current state of penalty administration and notes Caroline Ciraolo’s concerns regarding the Internal Revenue Service’s current approach to the consideration and assessment of civil tax penalties and frequent disregard for facts and circumstances that establish reasonable cause. .
The article notes:
The IRS needs to revamp its heavy-handed approach to penalty administration — and it should start by having Commissioner Daniel Werfel issue clear guidance to agency employees explaining the purpose of penalties, according to a tax attorney and former government official.
“This needs to come from the top,” said Caroline D. Ciraolo of Kostelanetz LLP. “After all these years, it’s time to have a reset on penalty administration.”
Speaking August 15 during a webinar hosted by the Center for Taxpayer Rights, Ciraolo said the IRS has lost sight of the reasons for imposing penalties. Noting the confidentiality provisions of section 6103, she said that if a taxpayer agrees to pay a substantial penalty at the end of an audit, there isn’t much of a deterrent effect on other taxpayers because the IRS can’t publicly disclose those details.
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