IRS Penalties Reasonable Cause Tax Litigation Tax Procedure

Reasonable Cause: Proving Reliance on a Tax Advisor

If you hire a competent tax advisor and end up having a late filed return, you may be able to avoid penalties for the late filing. But this is a defense. It is something that you, the taxpayer, have to prove. So how does a taxpayer prove that they relied on a tax advsior? The […]

IRS Penalties Reasonable Cause Tax Procedure Tax Returns

Is Reliance on a CPA Sufficient for a Late Filed Tax Form?

The IRS often turns a deaf ear to taxpayers who miss a filing deadline due to some action or inaction by their CPA or tax preparer. This is the case for late filing tax penalties. But what about a late filed accounting method change? Is reliance on a CPA or tax preparer sufficient for a […]

Reasonable Cause Tax Procedure

Penalty Abatement for Reliance on Tax Advisor Who Made Obvious Errors

The IRS often willing to abate or remove tax penalties. To do so, taxpayers usually have to show that they acted with reasonable cause and in good faith. Relying on a competent tax professional can be one way taxpayers can make this showing. But what exactly is a competent tax professional? The court addressed this […]

Reasonable Cause Tax Procedure

Relying on Tax Attorney for Filing Deadline is Reasonable Cause

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. […]

Reasonable Cause Tax Procedure Trust Fund Penalties

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? […]

Filing & Payment Penalties Reasonable Cause Tax Procedure

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 […]

IRS Penalties Reasonable Cause Tax Procedure

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 […]