Your Tax Liability
Presented by
Alvin Brown and Associates,
tax attorney, formerly with the Office of the Chief Counsel of the Internal Revenue Service.
Call (888) 712-7690
for all IRS tax issues,
problems and emergencies.
Protect yourself from IRS intimidation, errors, and penalties
Email at: info@irstaxattorney.com
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PENALTY AND INTEREST ABATEMENT OR REDUCTION
There are three reasons to discuss penalties and interest. First, penalties and interest are commonplace and hugely expensive for the taxpayer. Second, most representatives do not contest penalties. Third, a qualified tax attorney is frequently able to get tax penalties and interest abated, reduced or eliminated using research, analytical and interpretative skills.
The law on the penalty provisions for substantial understatement of income tax is reduced to the extent that there is substantial authority or adequate disclosure and a reasonable basis for the understatement. Whether there is or is not substantial authority for the tax treatment of an item depends on the facts and circumstances.
The accuracy penalty (20% of the underpayment) is reduced if there is substantial authority or adequate disclosure and a reasonable basis for the understatement, or the underpayment was not due to either negligence or disregard of rules or regulations.
The 25% penalty for failure to file a tax return or to pay tax will be abated if failure is due to a reasonable cause and not due to willful neglect.
Criminal prosecution and conviction may occur for tax evasion, willful failure to file a return, supply information or pay the tax due, fraud and false statements, or preparing and filing a fraudulent return. The 75% criminal penalty will be abated where taxpayer establishes there was no tax evasion, no willful failure to file a return, supply information, or pay any tax due; no fraud or false statement; and no preparation and filing of a fraudulent return.
In case of an underpayment, the fraud penalty will be abated if it is established by a preponderance of the evidence that the underpayment is not attributable to fraud. The IRS must prove fraud by clear and convincing evidence.
Because there are so many "terms of art" in the penalty provisions, as indicated by the italics, an expert tax attorney is mandatory to research the substantial case law and precedents. For example, there are regulations and a large body of case law that interpret words such as reasonable cause and willful neglect. The economic cost to the taxpayer to too large to leave the practice of tax law by anyone other than a tax attorney who is trained to research these and other tax law issues.
Alvin Brown and Associates, Attorney at Law
Phone: (888) 712-7690
Fax: (703) 425-1567
E-Mail: info@irstaxattorney.com