Accuracy-Related Penalty Cannot Be Assessed Against Taxpayer Who Did Not File Valid Return.

• Author: Fiore, Nicholas J.

In 1997, T filed a document that purported to be his 1995 Federal income tax return. The document was six sheets of plain paper, and listed T's name, address, Social Security number and dependents. It included a listing of compensation (titled "Gross Receipts") and a listing of taxes withheld, Social Security taxes and child care expenses (titled "Expenditures"). It also included a statement that the document was not a concession or admission of any tax obligation, but was a good-faith effort to supply all relevant information. It also stated that the document was "not intended in any way, and should not be construed, as a self-assessment."

The IRS did not process the document as a return because it did not include sufficient information, and sent T a deficiency notice in 1998.

The Service also assessed a Sec. 6662(a) accuracy-related penalty against T, which T challenged. In a memorandum opinion (Nims J.), the Tax Court holds for T; because T's document is not considered a return and Sec. 6662(a) may only be imposed "when a return of tax is filed," T may not be assessed a penalty under Sec. 6662(a).

Sec. 6011(a) requires taxpayers to file a return or statement according to the forms and regulations prescribed by the Secretary.

Congress has given discretion to the IRS to prescribe by regulation forms of returns and has made it the duty of the taxpayer to comply. Thus, it implements the system of self-assessment, which is so largely the basis of American income taxation. The purpose is not alone to get tax information in some form but also to get it with such uniformity, completeness and arrangement that the physical task of handling and verifying returns may be readily accomplished.

Regs. Sec. 1.6011-1(b) provides:

(b) Use of prescribed forms. Copies of the prescribed return forms will so far as possible be furnished taxpayers by district directors. A taxpayer will not be excused from making a return, however, by the fact that no return form has been furnished to him. Taxpayers not supplied with the proper forms should make application therefor to the district director in ample time to have their returns prepared, verified, and fried on or before the due date with the internal revenue office where such returns are required to be fried. Each taxpayer should carefully prepare his return and set forth fully and clearly the information required to be included therein. Returns which have not...