Daily Tax Update - January 18, 2012: IRS Updates Accuracy-Related Penalty Guidance

SERVICE RELEASES UPDATED GUIDANCE ON DISCLOSURES ADEQUATE TO AVOID CERTAIN ACCURACY-RELATED PENALTIES: The Service today issued updated guidance, identifying when disclosure is adequate to reduce a substantial understatement of income tax under section 6662(d) and to avoid tax return preparer penalties under section 6694(a). This guidance, Revenue Procedure 2012-15, updates Rev. Proc. 2011-13 to correct a reference to Schedule M-3 (Form 1120) and to address the employee-remuneration limitations under the amended section 162(m). The updated revenue procedure applies for any income tax return filed on 2011 tax forms for tax years that begin in 2011, and any income tax form filed on 2011 tax forms in 2012 that are for short tax years beginning in 2012.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving. Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them. Read more information on Steptoe's tax practice.