[IMGCAP(1)]A recent Tax Court case involving listed transactions is important for what did not happen: The Internal Revenue Service did not “throw the book” at the taxpayer.

On Jan. 28, 2013, U.S. Tax Court Judge Kathleen Kerrigan decided Soni v. Commissioner. This case can be viewed as another in a surprisingly short line of taxpayer defeats involving listed transactions. See, for example, the 2010 case, McGehee Family Clinic, P.A., et al. v. Commissioner, involving a welfare benefit plan. However, in the Soni case, the fact that the IRS could have charged the taxpayers with harsher penalties may be helpful in other matters involving listed transactions. It may also forecast the IRS’s approach to the non-willful penalties in the Offshore Voluntary Disclosure Initiative; and help reassure the public that the IRS uses penalties to promote compliance, not raise revenue.

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