WASHINGTON - A federal court in Tennessee has rejected a law firm's claim that the Internal Revenue Service should be drastically limited in the monetary penalties it can assess under a section of the tax code that allows it to sanction bond lawyers, underwriters, and other transaction participants that engaged in abuse.

The Jan. 27 ruling by Judge Curtis L. Collier of the U.S. District Court for the Eastern District in Chattanooga runs counter to a decision made last year by a federal judge in California, who sided with another law firm in ruling that the IRS could only impose relatively small monetary penalties under Section 6700 of the tax law.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.