The IRS assesses penalties against taxpayers for, among other things, the following: late filing of a tax return; late payment of tax; the negligent preparation of a tax return; the substantial underpayment of tax; and civil fraud. Penalties range from 5 percent per month in the case of late filing of a return to 75 [...]

National Taxpayer Advocate Nina Olson has issued her annual report on the most frequently litigated tax issues: Internal Revenue Code § 7803(c)(2)(B)(ii)(X) requires the National Taxpayer Advocate to identify the ten tax issues most often litigated in the federal courts, classified by the types of taxpayer affected. Through analysis of these issues, the National Taxpayer Advocate [...]

§6673 imposes a 75% penalty for underpayments of tax that are attributable to fraud: (a) Imposition of penalty If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the [...]

The IRS has the legal right to audit any tax return it so chooses for any reason it chooses. The threat of an audit is what makes most taxpayers take seriously their obligation to comply with the letter of the law. The odds of being audited are generally very low, therefore, if you get an [...]