In recent years, the IRS has distributed a great deal of information by posting FAQs to its website. But to what extent should taxpayers rely on the answers to FAQs? Acting IRS Chief Counsel William Paul recently addressed concerns regarding IRS-issued FAQs. “The IRS is comfortable with the view that if a taxpayer relies in good faith on an FAQ and that reliance is reasonable under all the facts and circumstances, the taxpayer should have a reasonable cause defense and should not be subject to a negligence penalty or other accuracy-related penalty,” Paul said. The IRS hopes to soon unveil a system that will archive FAQs and allow users to view how they may have been edited by the IRS.
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