It is clear that one cannot rely on a tax attorney to file a tax return for purposes of removing penalties if the return is not filed. But can you rely on an attorney if the attorney provides advice as to the wrong date for filing? The court addresses this in Estate of Hake v.… Continue reading Relying on Tax Attorney for Filing Deadline is Reasonable Cause
Category: IRS Penalties
About IRS Penalties
There are hundreds of different penalties the IRS can assess. The IRS often assesses penalties automatically, even when penalties should not be applied. Most penalties can be abated or removed due to special circumstances, such as hardship or reasonable cause.
If you are not familiar with IRS penalties, please visit this page for an overview of IRS penalties and this page how we can help remove IRS penalties.
This page provides detailed analysis of various aspects of IRS penalties.
If you are looking for information about a particular type of IRS penalty, you can narrow the articles down to that penalty by selecting from the following subtopics:
Accuracy Penalties, Filing & Payment Penalties, Foreign Penalties, Fraud Penalties, Reportable Transactions, Tax Return Preparer Penalty, Trust Fund Penalties, and the Reasonable Cause Defense.
You can also give us a call at (713) 909-4906 if you need help with an IRS penalty.
No Reasonable Cause Defense for Some Trust Fund Penalties
The IRS is serious about unpaid employment taxes. The trust fund recovery penalty can be used to collect these taxes. This penalty makes a business tax liability a personal liability. With most penalties, the penalty can be abated for reasonable cause. But what about the trust fund penalty? Can it be abated for reasonable cause?… Continue reading No Reasonable Cause Defense for Some Trust Fund Penalties
Proof of Cash on Hand to Abate Failure to Pay Penalty
The failure to pay penalty is one of the most commonly assessed penalties. The penalty does not apply and can be abated or removed if the taxpayer can establish that the failure to pay is due to reasonable cause and not to willful neglect. But how do you establish reasonable cause? In C1 Design Group, LLC… Continue reading Proof of Cash on Hand to Abate Failure to Pay Penalty
Judicial Review for Trust Fund Recovery Penalties
Taxpayers who are assessed trust fund recovery penalties need to take note of the U.S. Tax Court’s recent decision in Anderson v. Commissioner, T.C. Memo. 2016-219. The decision highlights a potential foot fault they may make when trying to resolve their trust fund recovery penalties at the IRS administrative level. Facts and Procedural History The… Continue reading Judicial Review for Trust Fund Recovery Penalties
Written Manager Approval for Penalties
An IRS agent is generally required to get written approval from their manager for a tax penalty can be assessed. This is requirement is set out in the Code. This begs the question as to what happens if the agent does not get written approval before he closes the audit? The court addressed this in… Continue reading Written Manager Approval for Penalties
Reportable Transaction Penalty, Full Payment Required
Tax matters can be litigated in a number of different courts. One of the advantages of bringing suit in U.S. Tax Court is that the tax does not have to be paid prior to bringing suit. For tax matters litigated in the U.S. District Courts or the Court of Federal Claims, the tax has to… Continue reading Reportable Transaction Penalty, Full Payment Required
Stay-at-Home Mom Not Liable for Trust Fund Recovery Penalty
The IRS has the ability to assess a trust fund recovery penalty against those who are responsible for withholding payroll taxes for employees if they fail to withhold and pay over the taxes to the IRS. Then penalty is equal to the amount of the withheld but unpaid tax. Liability for the penalty falls on… Continue reading Stay-at-Home Mom Not Liable for Trust Fund Recovery Penalty
Accuracy Related Penalties Do Not Apply to Full Understatement of Tax
In Hatcher v. Commissioner, T.C. Memo. 2016-188, the court considered a very common error IRS agents make in computing the Section 6662 accuracy related penalty. The IRS applied the penalty to the entire understatement of tax, rather than the portion of the understatement that was not subject to the reasonable cause defense. This is one… Continue reading Accuracy Related Penalties Do Not Apply to Full Understatement of Tax
Court Revisits Reasonable Cause for Abating Penalties
The U.S. Supreme Court has made it clear that taxpayers cannot avoid penalties by blindly rely on tax advisors to file tax returns and make tax payments. These situations are unfortunate. The court in Specht v. United States, No. 15-3095 (6th Cir. 2016) highlights one way that taxpayers may be able to avoid the bright […]
The post Court Revisits Reasonable Cause for Abating Penalties appeared first on Houston Tax Attorney: Texas Lawyer.
Court Revisits Reasonable Cause Abating Penalties
The U.S. Supreme Court has made it clear that taxpayers cannot avoid penalties by blindly rely on tax attorneys to file tax returns and make tax payments. These situations are unfortunate. The court in Specht v. United States, No. 15-3095 (6th Cir. 2016) highlights one way that taxpayers may be able to avoid the bright… Continue reading Court Revisits Reasonable Cause Abating Penalties