TIGTA studied how effective the IRS is in using the requirements and penalty regime that apply to tax preparers. The TIGTA study attempted to determine whether controls are in place to ensure that the IRS effectively enforces and applies penalties to paid preparers as required by Sec. 6694.
Advertisement
TOPICS / PROCEDURE
Collections, Liens & Levies
Supreme Court Resolves Circuit Split on 40% Gross Valuation Misstatement Penalty
The Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero.
For Penalty Calculation, Amount of Tax Shown on Return Reduced by Credits, Tax Court Holds
The Tax Court held that the amount of tax shown on the taxpayers’ return was reduced by refundable credits, but not below zero, for purposes of calculating the Sec. 6662(a) accuracy-related penalty.
IRS Tightens Penalty Relief
Recent IRS actions suggest a movement away from granting penalty relief. Recent budget cuts, furloughs, and negative press have exacerbated the trend by significantly decreasing IRS resources, resulting in slower responses to taxpayer inquiries.
IRS Provides Details About Postponed Employer Health Care Penalty and Information Reporting
The IRS made official the postponement of the large-employer health care penalty and certain information reporting rules that had been informally announced July 2.
Treasury Postpones Employer Health Care Penalty, Information Reporting for One Year
Large employers who fail to provide minimum health coverage for employees will not be subject to the shared-responsibility penalty until 2015 after Treasury announced that it would delay certain provisions of 2010’s health care legislation.
Using the First-Time Penalty Abatement Waiver
This article explores the IRS first-time penalty abatement waiver and explains how to help clients remove certain penalties using it.
Tax Court Reverses Its Position on Valuation Misstatement Penalty; Supreme Court Agrees to Hear Case on the Issue
The Tax Court held that a taxpayer may not avoid application of the gross valuation misstatement penalty by conceding that adjustments made in an IRS FPAA notice were correct on grounds unrelated to valuation or basis.
Prop. Regs. Allow Material Advisers to Request Extension
The IRS issued proposed regulations governing the penalty for failure of material advisers to provide lists of advisees in reportable transactions.
Incorrect Expert Advice About Estate Return Filing Deadline Does Not Excuse Penalty
An executor who relied on his accountant’s mistaken advice that he had obtained a one-year extension of the filing due date for Form 706 was nonetheless liable for a large late-filing penalty.
Expanded Due-Diligence Requirements for 2012 Returns
This item discusses Form 8867, Paid Preparer’s Earned Income Credit Checklist, extensive new due-diligence requirements for wage earners, and Schedule C, Profit or Loss From Business
Bankruptcy and the Trust Fund Recovery Penalty
When a corporation fails to remit the withheld taxes to the government, the IRS looks through the corporation to the individual or individuals who are responsible for the failure.
Taxpayers Filing Delayed Forms Get Late-Payment Penalty Relief
The IRS announced that it will waive the penalty normally assessed for late payment of income tax, for taxpayers who have requested an extension of time to file their return and who are filing one of the 31 forms that were delayed until March.
Tax Court Stops Taxpayers from Avoiding 40% Penalty by Conceding on Alternative Grounds
The Tax Court refused to grant partial summary judgment to a partner who had conceded his tax shelter case on grounds other than valuation in an attempt to avoid the 40% gross valuation misstatement penalty.
Sec. 6708 Regs. Permit Material Advisers to Request Extension
The IRS issued proposed regulations governing the penalty for failure of material advisers to provide lists of advisees in reportable transactions, which applies if the advisers do not supply the lists to the IRS within 20 business days after a written request.
The Complexities of Calculating the Accuracy-Related Penalty
Calculating the accuracy-related penalty can quickly become a complex and sometimes daunting task that requires careful consideration and insight.
IRS Provides Penalty Relief for Farmers Hit by Delayed Start of Tax Season
The IRS announced that it will provide estimated tax penalty relief for farmers and fishermen who are not able to file and pay their 2012 taxes by the March 1 deadline due to the delayed start for filing tax returns.
IRS Announces Abatements of Frivolous Filing Penalty
Taxpayers who have filed all required tax returns and paid all outstanding tax liabilities, including penalties (except for the Sec. 6702 penalty) and related interest, may qualify for a one-time reduction to $500 of any unpaid penalties that the IRS has assessed (Rev. Proc. 2012-43).
Rev. Proc. Updates Guidance on Adequate Disclosure of Return Positions
The IRS released its annual update identifying when a taxpayer’s disclosure of an item or position in an income tax return is adequate for purposes of reducing the understatement of tax penalty and the tax return preparer penalty for understatement due to unreasonable positions.
One-Time Abatement of $5,000 Frivolous Filing Penalty Announced
Taxpayers who have filed all required tax returns and paid all outstanding tax liabilities, including penalties (except for the Sec. 6702 penalty) and related interest, may qualify for a one-time reduction to $500 of any unpaid penalties that the IRS has assessed.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
