Court: Complex Tax + Professional Advice = No Tax Penalty

We know that we can take steps to minimize our taxes. Our tax laws allow for this and, on review, the courts have made this clear. Tax penalties are usually the problem with taking tax positions in situations that are not entirely clear. Taxpayers who find themselves having to make decisions in these gray areas…

The Injunction for Tax Return Preparers

The government often has a myriad of remedies available to it. There are common situations in which the government does not have a consistent and thoughtful process for organizing how and when it will pursue the various remedies. This ad hoc method often results in outcomes that are not tailored to achieve the government’s aims…

Bookkeeper Liable for Trust Fund Recovery Penalty

IRS employees are tasked with making decisions. These decisions dictate who owes taxes and penalties and who does not. These decisions are usually made in the context of well trodden areas and by employees who make the same type of decisions over and over. This is due to the volume of disputes that are created…

IRS Says Congress’ Penalty Relief Not Available

Irs Says Congress’ Penalty Relief Not Available

To be viable, businesses have to pay for their operations and, after-tax, produce a profit or return. The tax burden can make it very difficult to produce a profit. This is particularly true when sales taxes and payroll taxes are considered. The sales tax is imposed on the transfer of property (and in some states…

Hospital Administrator Owes Trust Fund Penalty

Hospital Administrator Owes Trust Fund Penalty

Employment taxes can be deadly for businesses. Once a business gets behind, it can be impossible to catch up. Those operating a failing or struggling business may feel that using employment taxes as a short-term loan from the IRS is justified. The thinking may be that they are needed to keep employees employed, to save…

Failure to Review Tax Return Voids Penalty Defense

Failure To Review Tax Return Voids Penalty Defense

The IRS is quick to impose penalties. Many penalties are automatically imposed by the IRS’s computers. Even on audit, the IRS’s leadsheets direct IRS auditors to consider penalties before closing the audits. Most penalties can be abated if the taxpayer can establish reasonable cause. This is a facts and circumstances analysis. The courts have accepted…

Avoiding Tax Penalties for Bookkeeper’s Mistakes

Avoiding Tax Penalties For Bookkeeper’s Mistakes

Taxes are computed based on accounting records. Accounting records are often complied by bookkeepers who have no tax training or experience. The bookkeepers may not intend to provide tax advice. Their work product may be used to prepare tax returns, however. The tax return preparer may move the numbers from the bookkeeper’s profit and loss…

Rejected e-File Return is a Valid Tax Return

Rejected E-file Return Is A Valid Tax Return

The IRS’s Identity Protection Personal Identification Number (“IP PIN”) is intended to protect those who are victims of identity theft. It does so by making it harder for third parties to file fraudulent tax returns. The IP PIN can also cause problems for taxpayers. This is particularly true for tax returns that are filed close…

Illness as a Defense to Late Filing Penalties

Illness As A Defense To Late Filing Penalties

Will the IRS penalize you if you are unable to file your tax return on time due to the burden of caring for a loved one with COVID? The IRS has not provided penalty relief for taxpayers impacted by COVID-19. The existing penalty relief rules may provide a remedy for some taxpayers. These rules do…