An In-depth Understanding of IRS Tax Penalties and Expert Strategies to Prevent Them
According to the Internal Revenue Service Restructuring Act, each notice that imposes a penalty must include the name of the specific penalty, the code section that imposes that penalty, as well as the computation of penalty. The Act also needs approval specifically from IRS management so that it can assess all the penalties not generated by computer, unless expected. This provision will not include the failures to file penalties, pay penalties or the penalties which arise due to failure of paying estimated tax. This provision was put to action after December 31, 2000.
Generally, when it comes to failure to file (FTF) and failure to pay (FTP), they are based on the amount of tax that should be shown on late-filed or late-paid return, lessened by any specific portion of tax paid before or on the due date prescribed during the return. Failure to file partnership return is an exception to the rule, which is based on $50 penalty per month, per month for each month of late return.
This webinar by our expert speaker and taxation expert Robert E. McKenzie will start with the origin of tax penalties. You will understand what filed returns are, what bad checks are, what happens when you fail to file tax returns, etc. Additionally, you will learn the process of computing penalties in details. The session will also discuss failure to deposit penalty and what is a reasonable cause. You will get to know the reasons for penalty relief and the statutory exceptions. Robert will draw conclusion by explaining what Reasonable Cause is, when a Reasonable Cause assistant is needed and what is happens during first time abatement. This session will use real IRS cases as a learning tool for participants.
Origins of Tax penalties
What is filed return and bad checks
What happens and what are the penalties if you fail to file tax returns or pay tax
How to compute penalties
What happens when you fail to deposit penalties
Cascading penalties according to IRC Sec. 6656
What is ordinary business care and Prudence
What are the reasons behind penalty relief
What is reasonable cause and what are the exceptions to the cause
Robert E. McKenzie is a Partner of the law firm of Arnstein & Lehr LLP of Chicago, Illinois, concentrating his practice in representation before the Internal Revenue Service and state tax agencies. He has lectured extensively on the subject of tax representation and has presented courses be...