{"id":4085,"date":"2021-11-03T20:56:09","date_gmt":"2021-11-03T20:56:09","guid":{"rendered":"https:\/\/patellawoffices.com\/blog\/?p=4085"},"modified":"2021-11-03T20:56:11","modified_gmt":"2021-11-03T20:56:11","slug":"irs-updates-process-for-faqs","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/irs-updates-process-for-faqs\/","title":{"rendered":"IRS Updates Process for FAQs"},"content":{"rendered":"\n

IRS finally figured out that taxpayers need help with IRS frequently asked questions (FAQs). IRS places FAQs on its website and taxpayers naturally read them and believe them to be true and reliable. IRS has issued more than 1,100 FAQs on myriads of topics and laws. However, in the past, the US Tax Court has said, \u201cinformal guidance, such as the FAQs posted to the IRS\u2019s website, is not an authoritative source of federal tax law.\u201d<\/p>\n\n\n\n

The IRS recently announced<\/a> that if a\ntaxpayer relies in good faith on frequently asked questions (FAQs) that the IRS\nposts to its website, and if that reliance is reasonable, then the taxpayer\nwill have a reasonable-cause defense against any negligence penalty or other\naccuracy-related penalty if it turns out that the FAQ does not correctly state\nthe law as it applies to the taxpayer’s situation. This new policy applies to\nall FAQs, including those released by the IRS before the policy was announced.<\/p>\n\n\n\n

The IRS updated its “General\nOverview of Taxpayer Reliance on Guidance Published in the Internal Revenue\nBulletin and FAQs<\/a>” webpage to reflect this new stance. Significant FAQs on newly enacted tax legislation, as well as any later\nupdates or revisions to these FAQs, will now be announced in a news release and\nposted on IRS.gov in a separate Fact Sheet. <\/p>\n\n\n\n

FAQ\narchive and transparency about changes<\/strong><\/p>\n\n\n\n

The IRS also announced that it is updating its process for\nissuing FAQs following the enactment of new tax legislation. Under the new\nprocess, FAQs addressing new legislation, as well as any revisions or updates\nto those FAQs, will be announced in an IRS news release and posted on the IRS\nwebsite in a separate fact sheet. Older versions of FAQ fact sheets will be\nkept on IRS.gov so that taxpayers can refer to any prior version that they may\nhave relied on. The IRS says this process addresses taxpayer concerns about\ntransparency and the potential impact on taxpayers when FAQs are amended.<\/p>\n\n\n\n

Despite the IRS stating that it will retain prior versions if you rely on an IRS FAQ for a position, we recommend printing out the IRS FAQ and filing it away, at least until the statute of limitations on assessment has expired.<\/p>\n\n\n\n

Some of those taxpayer concerns were voiced by National Taxpayer Advocate in a\u00a0blogpost<\/a>, in which she recommended that the IRS (1) “should never assess a penalty against a taxpayer for taking a position consistent with an FAQ posted on the IRS website at the end of a taxpayer’s taxable year or at the time of return filing unless the IRS has convincing evidence the taxpayer knew the FAQ had been changed” and (2) “should include the versions and dates of each FAQ on its website or create an archive of obsolete or modified FAQs, including applicable dates, so that taxpayers can locate an FAQ that was in effect at the time they filed their returns.”<\/p>\n\n\n\n

Overall, the IRS news release should be viewed as a\npositive development. The IRS has acknowledged the important role that IRS FAQs\nplay, and that taxpayers should not be penalized for relying on IRS FAQs.\nHowever, IRS FAQs remain not binding authority and informal guidance and,\nunlike guidance published in the Internal Revenue Bulletin, cannot be relied\nupon as support for the correctness of a tax reporting position. Also, the news\nrelease and fact sheet are not authoritative guidance and can be revoked at any\ntime. <\/p>\n","protected":false},"excerpt":{"rendered":"

IRS finally figured out that taxpayers need help with IRS frequently asked questions (FAQs). IRS places FAQs on its website and taxpayers naturally read them and believe them to be true and reliable. IRS has issued more than 1,100 FAQs on myriads of topics and laws. However, in the past, the US Tax Court has […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4085","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=4085"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4085\/revisions"}],"predecessor-version":[{"id":4089,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4085\/revisions\/4089"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=4085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=4085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=4085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}