March 2018 JD Supra

According to the IRS, accuracy related penalties remain the number one most litigated tax issue.  The Internal Revenue Code authorizes the IRS to impose penalties if a Taxpayer is negligent or disregards tax rules and regulations that cause an underpayment of a required tax.  The amount of an accuracy-related penalty equals 20 percent of the portion of the underpayment that is attributable to the Taxpayer’s negligence or disregard of rules or regulations, or to a substantial “understatement”.