Haynes v. IRS

123 AFTR 2d 2019-570
Fifth Circuit Court of Appeals

Summary of the Case

If a tax return is filed late or the tax due is not fully paid, the IRS will generally impose delinquency penalties that can exceed 25% of the amount owed.

These penalties can be abated (set aside) if the Taxpayer has a reasonable excuse, that he or she “acted in a reasonable and prudent manner”.

Historically, reliance upon an accountant for substantive tax advice constitutes reasonable cause. However, in Boyle the Supreme Court held one cannot rely on an accountant to timely mail a return because this is a non-substantive act (placing a paper tax return in a stamped envelope).


In Haynes, the Fifth Circuit reversed the District Court (which had followed Boyle and held for the IRS) and ruled that if the accountant acted reasonably then that would extend to the Taxpayer. This is the beginning of case law efforts to hold that e-filing is not merely a clerical act but something similar to a substantive act such that the duty to file could perhaps be transferred to another (and thus may qualify as a reasonable excuse).

This case was ranked one of the 10 most important tax cases in 2018 by Lexis/Nexus. The American College of Tax Counsel agreed and filed an amicus brief in support of the Taxpayer. Numerous tax commentators have written in support of this potentially significant change in the tax law.