Baker Hostetler partner James N. Mastracchio was quoted in “How Do FAQs Fit Into the Guidance Puzzle?” which appeared in Tax Notes Today, News Analysis, on April 4, 2011.
For practitioners keeping track of the many kinds of Treasury and IRS guidance, the increasing issuance of frequently asked questions has caught the attention of practicing tax professionals want to be sure that FAQs are guidance that they can rely on without getting tripped up later by sudden policy changes.
Mastracchio, co-chair of Baker Hostetler's tax controversy practice, said that IRS FAQs addressing a settlement program are welcome "because they provide the tax community with some sense of what to expect." Without guidance, it's hard to advise clients on the process and procedures that the IRS will use, which could influence their decision to participate, he said, adding, "Seeing it in writing is very helpful."
Mastracchio said his experience with the offshore voluntary disclosure programs has been largely positive. "The agents and technical advisers I've dealt with have all been well trained and are versed in the nuances of the applicable FAQs," he said. "FAQs are an opportunity to know what the Service is thinking, and if there is a problem, I'd rather have something in writing," he said.
With respect to original FAQ 35 of the Off-Shore Voluntary Disclosure Initiative: “The prior FAQ stated that taxpayers would not be subject to a penalty higher than that possible under the existing statutes. But the 2011 FAQs no longer restrict agents to those penalty limits, and some taxpayers who entered the 2009 program have clashed with agents over much higher penalty thresholds,” Mastracchio added.