WASHINGTON, DC, May 26, 2011 – Michael J. Grace, JD, Managing Director-TAARS®, critiqued in a major tax publication a recent pronouncement by the Internal Revenue Service Office of Chief Counsel addressing interest on large corporate tax underpayments, colloquially known as “hot interest.” Michael explained that the pronouncement conflicts with both a decision of the United States Tax Court and the IRS’ directives to its revenue agents.
Managing Director’s Critique
In Federal Tax Weekly for May 26, 2011, published by CCH, a Wolters Kluwer business, Michael Grace commented: “Because of an NOL carryback, a large corporate underpayment on which hot interest might have been owed arguably was not, under the rationale of Avon Products (78-2 USTC ¶ 9821), ‘due and unpaid.’ The CCA, which seems to diverge from language in Internal Revenue Bulletin Section 20.2.5.8.1 (4), suggests that IRS Chief Counsel intends to continue litigating the issue in Med James.” Full story.