- Ag Docket
(petitioner’s return had zero tax liability but claimed refundable credits which triggered refund of $7,327; IRS issued refund, but later recomputed and determined that petitioner owed $144 (petitioner had to repay the $7,327 and an additional $144) and assessed penalty of $1,494.20 (20% underpayment penalty); petitioner challenged IRS position that refundable credit counted as an “underpayment”; court noted that accuracy-related penalty is on deficiencies based on how much the taxpayer underpaid the “tax required to be shown on the return” and determined that refundable credits cannot take the tax below zero for purposes of the accuracy-related penalty; thus, underpayment was $144 for penalty computation purposes).
CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.