Over the last couple of years, IRC 6751(b) has been a thorn in the side of the IRS. A few taxpayer “wins” have come courtesy of IRC 6751(b). It is a short, concise statute that spells out the procedural requirements that the IRS must follow before assessing certain penalties. IRC 6751(b) does not apply to all penalties; it does not apply to penalties that are automated – from an IRS Service Center for example. But in other contexts, like fraud penalties, civil penalties, accuracy related penalties, IRC 6751(b) may apply. The procedural requirements are clear and require that the IRS Agent making the penalty assessment must first obtain prior personal approval in writing by an immediate supervisor or manager. Absent that personal approval in writing, the penalty cannot stand. It is then unlawful, and it must be unwound. To successfully challenge a penalty by way of IRC 6751(b), there must be a “formal communication” of the penalty assertion given to the taxpayer (which generally means a formal letter of some sort that gives the taxpayer IRS Appeals rights). So not all communications (verbal or preliminary) fall under the purview of IRC 6751(b). If, however, you find yourself in a situation where penalties have been assessed against you “in the field”, by an IRS Collection Officer or an IRS Examiner, you are well served – particularly at IRS Appeals – to request proof that 6751(b) manager approval was obtained prior to the penalty being assessed. The IRS then has the burden of producing that approval and if it cannot, your penalty will be abated because it is then an illegal assessment.