According to documents submitted to the US Tax Court, the Internal Revenue Service is charged with retroactively applying suggested fines to three corporations that lead to investigation.
The three companies claim in tax court documents that an IRS supervisor intentionally approved proposed fines against them with a backdated date.
Tax Benefits and Legal Challenges
According to the IRS, a landowner can give up their right to develop their property in a partnership known as a conservation easement in return for money and tax benefits, such as the opportunity to deduct charitable contributions.
According to the petitions submitted by the three companies, Natural Aggregates Partners, Basswood Partners, LLC, and Delwood Partners, LLC, each of the three declared charity deductions connected to a conservation easement arrangement.
According to the petitions, the three corporations later had to pay millions of dollars in fines because of the deductions.
A revenue agent emailed a supervisor on July 12, 2021, requesting permission to impose fines against the three companies, according to tax court documents.
His superior authorized the fines two days later. According to court documents, the supervisor did not specify any consequences or provide any justification for their allegation.
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Evidence of Backdating in IRS Audit Documents
The revenue agent allegedly asked the same supervisor to sign penalty approval forms for the audit on March 11, 2022, over eight months later, and requested that the supervisor use the date July 14, 2021, or a date shortly thereafter, rather than the date of March 11, 2022.
According to court documents, the supervisor then admitted to backdating the lead sheets and returned the penalty consideration lead sheets with the date of July 14, 2021.
Last week, Michael Todd Welty, the lawyer for the three companies, filed a court document asking the IRS to acknowledge the claims within 30 days and to attest to the veracity of the petitioner’s documents, which include copies of emails between the IRS revenue agent and supervisor.
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