Partial Payment Rule of Code Sec. 6694(c) Continues to Serve as Trap for the Unprepared Tax Return Preparer: Riter v. United States

Abstract

The U.S. District Court for the District of Utah, in Riter v United States, dismissed a tax-return preparer’s refund claim as untimely filed and denied review of the preparer penalties assessed against him pursuant to Code Sec. 6694. The Utah district court reached the same result, on essentially similar fact, as did the Ninth Circuit Court of Appeals last summer, in Taylor v. United States. Taylor likewise dismissed a tax preparer’s action that sought a refund of Code Sec. 6694 penalties because the claim had also been untimely filed.

These decisions highlight the importance of strict compliance with the shortened filing deadline imposed by Sec. 6694(c)(2), if a tax-return preparer wants to take advantage of the statutory exception to the full payment rule.

Keywords: IRS, Tax Return Preparer, Penalties, Refund Jurisdiction, Full Payment Rule