Assessable Penalties and Abating Them
The United States federal tax system operates on a system of somewhat voluntary compliance. However, human nature being what it is, a voluntary system without a means of enforcement lends itself to fraud, ignorance, and disregard. I... David Woods, EA
Avoid Penalties by Doing Your Due Diligence
New Due Diligence Requirements For tax year 2020, the Consolidated Appropriations Act, 2021, allows eligible taxpayers to elect to use their 2019 earned income to figure the 2020 earned income credit (EIC) or additional child tax cred... TheTaxBook
An Introduction to the Supervisorial Approval of Penalties Under Internal Revenue Code Section 6751(b)
Internal Revenue Code (the IRC or the Code) §6751(b)’s supervisory approval requirement has been a hotly litigated issue over the past few years. This article will introduce you to §6751(b) and help explain how supervisory approval is obt... Frank Agostino and Phillip J. Colasanto
Is Timely and Meaningful IRS Supervisor Approval Needed in Order to Assess Penalties?
Jesus R. Oropeza and Fabiola Anaya Oropeza, Petitioners v. Commissioner of Internal Revenue, Respondent T.C. memo, 2020-111 | Filed July 21, 2020 The Internal Revenue Code (the Code) requires the IRS to come forward with sufficient evidence that indicates the impositi... Steven R. Diamond, CPA, USTCP
Mitigating Penalties for Filing Incorrect Forms W-2
Forms W-2 were filed with the Social Security Administration (SSA) by January 31, 2019, but that is the end of the story only if all those Forms W-2 are correct. While 100 percent accuracy is always the goal, it is rarely achieved. So, the second part of the year-end pro... Alice Gilman, Esq
Fraudulent Tax Returns, Penalties, and Amended Tax Returns
Generally, a taxpayer may correct an error in a tax return without incurring interest or penalties by filing an amended return and paying any additional tax due on or before the due date (last day prescribed for filing). An amended return filed after the due date may be accepted, rejected, or ignored by the IRS in its sole discretion. It has been held that where the taxpayer files a false or fraudulent tax return but later... Steven R. Diamond, CPA, USTCP
Preparing an Accurate FBAR: Ten Common Mistakes
The failure to file an accurate and complete Financial Crimes Enforcement Network (FinCEN) 114, (Report of Foreign Bank and Financial Accounts (FBAR)) can result in serious penalties and consequences for a taxpayer. Unfortunately, the FBAR is one of those deceptively simple forms that does not appear to be complex due to the limited number of entries required. However, those unfamiliar with the form are prone to mistakes, as detailed rules ex... Randall Brody, EA
Ethics Rules, Penalties, and the Tax Preparers Engagement Letter
Perhaps one of the most important, but also one of the most overlooked, parts of the 1040 U.S. Individual Income Tax Return is the section near the bottom of the second page that states: “Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct and accurately list all amounts and sources of income I received duri... Anthony Santullo, EA