Rev. Proc. 2019-09: Adequate disclosures to reduce accuracy-related penalty

The IRS has released an advance version of Rev. Proc. 2019-09 concerning circumstances when a disclosure on a taxpayer’s income tax return with respect to an item or position is adequate for purposes of reducing the accuracy-related penalty under section 6662(d) (specifically relating to the substantial understatement aspect of the accuracy-related penalty) and for purposes of avoiding the tax return preparer penalty under section 6694(a).
 

Rev. Proc. 2019-09 [PDF 40 KB] updates Rev. Proc. 2018-11 and makes editorial but “no additional substantive changes.”

Rev. Proc. 2019-09 applies to any income tax return filed on 2018 tax forms for a tax year beginning in 2018, and to any income tax return filed in 2019 on 2018 tax forms for short tax years beginning in 2019.

Rev. Proc. 2019-09 does not apply with respect to any other penalty provisions—including the disregard provisions of the section 6662(b)(1) accuracy-related penalty, the section 6662(b)(6) accuracy-related penalty and the section 6662(i) increased accuracy-related penalty in the case of nondisclosed noneconomic substance transactions, and the section 6662(j) increased accuracy-related penalty in the case of undisclosed foreign financial asset understatements. If Rev. Proc. 2019-09 does not include an item, disclosure is adequate with respect to that item only if made on a properly completed Form 8275 or 8275-R, attached to the return for the year or to a qualified amended return.

The information contained in TaxNewsFlash is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230, as the content of this document is issued for general informational purposes only, is intended to enhance the reader’s knowledge on the matters addressed therein, and is not intended to be applied to any specific reader’s particular set of facts. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
 

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.
 

Direct comments, including requests for subscriptions, to Washington National Tax. For more information, contact KPMG’s Federal Tax Legislative and Regulatory Services Group at + 1 202.533.4366, 1801 K Street NW, Washington, DC 20006-1301.
 

To unsubscribe from TaxNewsFlash-United States, reply to Washington National Tax.
 

Privacy | Legal