Willful Or Non-Willful? That Is The Question: IRS Rejects Non-Willful Certification

Highlights

• The Internal Revenue Service (IRS) introduced the Streamlined Filing Compliance Procedures (Streamlined Program) for remediating noncompliance for certain non-willful taxpayers with favorable tax and penalty terms.
• As demonstrated in Flint v. United States, the IRS is not bound to accept a taxpayer's self-certification that noncompliance was not willful. Despite tenets of the Streamlined Program, the IRS may open an examination and assess additional tax and civil penalties, as well as investigate potential criminal liability.
• Flint demonstrates the importance of determining whether a taxpayer's U.S. tax and reporting noncompliance was the result of willful or non-willful conduct, which can be difficult given court decisions that have eroded traditional notions of willfulness.