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Showing posts from July, 2011

2011 IRS Nationwide Tax Forum Review

I just returned this weekend from the 2011 IRS Nationwide Tax Forum to obtain some Continuing Education Credits (CPEs) and to also take a few days to enjoy the beautiful weather in Orlando, Florida (don't worry IRS I will not deduct my expenses for the personal vacation time!).

Last year I attended the San Diego Tax Forum and was pleasantly surprised by the useful information I received however, there were some things that I found annoying such as everyone who prepared tax returns had to pay the IRS for a PTIN* (really? for a arbitrary IRS number so they can identify the preparer-guess the name, address and phone number of the preparer that are provided on the returns are not enough!) which costs us $64.25 every year in additional fees and of course will most likely go up every year (nickle-and-diming IRS).  They also are now requiring anyone who prepares tax returns to have to file electronically, which of course costs more money and that competency tests were right around the co…

IRS Issues Insight About TheTruth of Frivolous Tax Arguments

INTRODUCTIONfrom,,id=159853,00.htmlThis responds to some of the more common frivolous “legal” arguments made by individuals and groups who oppose compliance with the federal tax laws. The first section groups these arguments under six general categories, with variations within each category. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention. The second section responds to some of the more common frivolous arguments made in collection due process cases brought pursuant to sections 6320 or 6330. These arguments are grouped under ten general categories and contain a brief description of each contention followed by a discussion of the correct legal authority. A final section explains the penalties that the courts may impose on those who pursue tax cases on frivolous grounds. It should be noted that the cases cited as relevant legal authority are illustrative and are not …

IRS Penalty and Interest Rates

What are the penalties and interest? Can they be avoided?

In 1989, the IRS revamped its tax penalty system. Before the reform, more than 150 overlapping tax penalties existed. Consequently, a single infraction could result in multiple tax penalties. Below are the current tax penalties for various infractions.

Infraction: Penalty

Late Filing

(If the tax return is more than 60 days late, the minimum penalty is the smaller of $100 or 100% of the tax owed.)

5% per month of the net tax due (maximum 25%)
Late filing due to fraud

15% per month of the net tax due (maximum 75%)

Late tax payments

0.5% per month of the unpaid tax due (maximum 25%) The 0.5% rate increases to 1% after the IRS issues a notice of intent to levy.
Negligence or disregard of tax rules and regulations

20% of tax underpayment

75% of tax underpayment

Substantial understatements of income tax (tax underpayments that exceed the greater of 10% of the correct tax liability or $5,000) 20% of tax underpayment