IRS Seeks Comments on Business Valuation Penalty Paperwork
Published Date: 5/14/2025
Notice
Summary
The IRS is asking businesses to share their thoughts on rules about penalties for tax mistakes related to how they value transactions. There’s no change in paperwork, but they want comments by July 14, 2025. This helps keep tax rules clear and fair without adding extra hassle or costs.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Avoid Accuracy-Related Penalty With Documentation
If your business has a transaction subject to Internal Revenue Code section 482, you can exclude an amount from the Section 6662 accuracy-related penalty if you meet certain requirements and maintain documentation showing how the transfer price was determined. The documentation requirement is described in 26 CFR 1.6662-6(d)(2)(iii).
Paperwork Burden Continues: 8h per Response
The IRS estimates 2,500 responses for TD 8656 with an average of 8 hours and 3 minutes per respondent, totaling 20,125 annual burden hours. The notice states there is no change in the paperwork burden previously approved by OMB.
Ongoing Record Retention Requirement
Books or records related to this information collection must be retained as long as their contents may become material in the administration of any internal revenue law. Tax returns and tax return information generally remain confidential under 26 U.S.C. 6103.
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