Taxpayers often contest penalties by arguing that their failures were due to reasonable cause. Many of these penalty abatement requests are resolved at the administrative level. The cases that end up being litigated typically do not have the best facts…
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.
What Facts are Needed to Abate Penalties?
The IRS is authorized to abate penalties for reasonable cause. There is no set of standard facts or factors that show reasonable cause. Taxpayers have made various arguments, with the IRS and courts rejecting most of them. How bad does life have to be for there to be reasonable cause? The court addresses this in… Continue reading What Facts are Needed to Abate Penalties?
IRS Collections for U.S. Military Personnel
Judicial and administrative proceedings are temporarily suspended for those serving in the United States military. This includes a temporary hold on IRS collection actions. These laws are not provided in the Tax Code. Rather, they are set out in the Se…
The IRS’s Streamlined Procedures for Foreign Accounts
Given its limited resources and ability to detect foreign assets, accounts and income, the IRS has offered various voluntary programs to entice taxpayers to come clean and report this information. The IRS’s OVDP program and the more recent streamlined procedures are two examples. The Maze v. Internal Revenue Service, Nos. 15-1806 (D.D.C. 2016), highlights several… Continue reading The IRS’s Streamlined Procedures for Foreign Accounts
Online Payment Account Triggered FBAR Filing, Poker Websites Did Not
In Hom v. United States, No. 14-16214 (9th Cir. 2016), the court addressed whether an online payment account and whether poker websites triggered FBAR filing requirements. FBAR Filing Requirements Taxpayers with an interest in or authority over certain…
Online Account Trigger FBAR Filing, Not Poker Websites
In Hom v. United States, No. 14-16214 (9th Cir. 2016), the court addressed whether an online payment account and whether poker websites triggered FBAR filing requirements. The stakes are high with FBAR penalties, so those with foreign accounts should take heed. FBAR Filing Requirements Taxpayers with an interest in or authority over certain foreign accounts… Continue reading Online Account Trigger FBAR Filing, Not Poker Websites
Failing Business Triggers Trust Fund Penalties
Taxes are often neglected when a business is having financial difficulties. This can have serious repercussions for the business and the individuals who are responsible for having taxes withheld and remitted to the IRS. The IRS has the ability to assess trust fund recovery penalties against these individuals, which essentially makes the business tax liability… Continue reading Failing Business Triggers Trust Fund Penalties
Mentally Incompetent Owes Frivolous Return Penalty
In Chief Counsel Memo 201623010, the IRS addressed whether Section 6702 frivolous return penalty can be abated due to the taxpayer’s mental incapacity. One would think that a mentally incapacitated person would not be liable for a penalty for filing a frivolous tax return. Mental Incapacity, Generally The law recognizes that mental incapacity as a… Continue reading Mentally Incompetent Owes Frivolous Return Penalty
Court Affirms that Tax Prepearer Fraud Holds Open Assessment Statute
In Finnegan v. Commissioner, T.C. Memo. 2016-118, the U.S. Tax Court refused to reconsider its previous decision that a tax return preparers fraud keeps the statute of limitations open on the taxpayer’s Federal income tax return. The facts and procedural history are as follows: On February 7, 2013, the IRS issued a notice of deficiency […]
The post Court Affirms that Tax Prepearer Fraud Holds Open Assessment Statute appeared first on Houston Tax Attorney: Texas Lawyer.
You Cannot Dodge Notice for the Trust Fund Recovery Penalty
It is almost always advisable to keep on the lookout for and open correspondence from the IRS. The Haben v. Commissioner, T.C. Summary Opinion 2015-55, case provides an example. In Haben, the U.S. Tax Court concluded that a taxpayer could not contest a trust fund recovery penalty during a collection due process hearing because he… Continue reading You Cannot Dodge Notice for the Trust Fund Recovery Penalty