Speaking on a webcast on March 20 sponsored by the Practicing Law Institute, Bryan C. Skarlatos of Kostelanetz & Fink LLP argued that the increase in e-filing and encouragement from the IRS to engage in the practice should mean new law for penalties applicable to late filings.
"Is it really the taxpayer's fault if he listens to the IRS, has his accountant electronically file [for him], and for some reason it gets kicked back? The IRS is telling him to rely on the accountant," Skarlatos said. "The IRS is not requiring taxpayers to electronically file their own returns; it is expecting them to go to tax return preparers who handle electronic filing." He added that he has gotten relief in appeals for his clients facing penalties in those circumstances but not without a fight from the IRS agent who had been imposing the penalty. He said he expects cases addressing penalties and delinquent e-filers to arrive in the Tax Court in the next few years.