Skip Page Banner  
Skip Navigation

IRS Reduces Penalties for Tax Scofflaws if They Pay Taxes Owed

Tuesday, November 6, 2012
Taxpayers who owe a $5,000 penalty for filing frivolous tax returns with IRS will be able to reduce those penalties to $500 under guidance aimed at getting more cooperation from tax scofflaws. According to Revenue Procedure 2012-43, any taxpayer who seeks a reduction in writing will be eligible for the one-time penalty relief. However, those requesting reduction must abandon their frivolous positions and file valid tax returns for any type of tax that might be due for any taxable periods six years before the date of the request. That includes returns for any entity in which they have a controlling interest. Frivolous tax returns are ones that purport to be legitimate but contain no information on which the substantial correctness of the self-assessment can be judged, or ones that contain information that on its face indicates that taxpayers are presenting IRS with something that is substantially incorrect.

To view additional stories from Daily Tax Report register for a free trial now