Abstract
I. Introduction ... A. Propriety of a Duty to Correct Material Tax Return Errors ... B. Penalty Structure and Statutes of Limitations ... C. Article Organization
II. Merits of an Amended Return Obligation ... A. Current Lack of a Duty to Correct Tax Return Errors ... B. Justifications for Requiring Taxpayer Correction of Material Errors ... C. Constitutional Barriers to an Amended Return Obligation
III. Definition of a Proposed Amended Return Obligation … A. Definition of “Error” ... 1. Return Positions Less Likely than Not to Prevail ... 2. Retroactive Changes in the Law ... B. “Materiality” Defined ... 1. Basic Definition ... 2. “Materiality” of Multiple Errors ... 3. “Materiality” of Errors with No Impact on Tax Liability ... C. Taxpayer’s “Knowledge” of an Error and a Duty to Investigate
IV. Amended Return Obligation and the Penalty Structure ... A. Current Penalty Structure ... B. Penalties: A Normative Approach ... 1. Parity Structure Defined ... 2. Existing Penalties Contrasted with a Parity Structure ... C. Penalty Recommendations: Obligatory Amended Returns Filed ... 1. Abrogation of Penalty Exposure for Nonfraudulent Errors Voluntarily Corrected ... 2. Nonabrogation of Penalty Exposure for Fraudulent Errors ... a. Immunization from Fraud Penalties Undermining the Duty to File a Correct Return ... b. Lesser Appeal of Relief for Taxpayers Committing Fraud ... c. Fraud Penalty Relief Unlikely to Enhance Tax Compliance ... d. Difficulty of Formulating a Workable Rule That Waives Criminal Fraud Penalties ... 3. Countervailing Considerations ... a. Fairness of Compelling Taxpayers to Provide Evidence of Fraudulent Conduct ... b. Inhibiting Effect on Taxpayers Who Fear Innocent Errors Will Be Treated as Fraudulent ... D. Penalty Recommendations: Breaches of a Duty to Amend ... 1. A Parity Structure Favored ... 2. No Double Penalty ... 3. Reasonable Opportunity to Comply with a Duty to Amend
V. Amended Return Obligation and Statutes of Limitations ... A. Current Statutes of Limitations ... B. Limitations Periods: A Normative Approach ... C. Limitations Period Recommendations ... 1. Nonfraudulent Original Returns ... 2. Fraudulent Original Returns
VI. Conclusions
Recommended Citation
Judson L. Temple,
Rethinking Imposition of a Legal Duty to Correct Material Tax Return Errors,
76 Neb. L. Rev.
(1997)
Available at: https://digitalcommons.unl.edu/nlr/vol76/iss2/2