Complex IRS Penalty Abatement Procedures for Failure-to-File, Failure-to-Pay, and Accuracy-Related Penalties

The IRS assesses many types of penalties against taxpayers: late-filing penalties, late-payment penalties, estimated tax penalties (Secs. 6654 and 6655), accuracy-related penalties, and so on. Tax practitioners face these tax penalties almost daily, and this webinar will provide procedural and practical ways to obtain a penalty abatement.

The IRS employs strict standards for determining whether a taxpayer qualifies for a reduction in penalties for failure to file required tax returns. TIGTA issued a report indicating that IRS controls over penalties were deficient, leading to incorrect abatement in many tested cases. As a result, the IRS increased scrutiny over penalty abatement requests.

The Service has several appeal tracks for denial of abatement requests. Understanding the required documentation, which depends on the type of appeal and the basis for the taxpayer's claim, is critical to navigating the appeals process. Abatement appeals require significant substantiation, which can often be challenging to obtain.

Listen as our experienced panel of advisers provides a thorough guide to navigating procedural and practical ways to obtain a penalty abatement.

1. Failure-to-file and failure-to-pay penalties (Sec. 6651)
   1. Know how and when to attach a penalty non-assertion request to a late-filed return
   2. Establish an installment agreement
2. Estimated tax penalty (Sec. 6655)
3. Accuracy-related penalty (Sec. 6662)
   1. Determining specific tax authority standards (e.g., the "more likely than not" standard or "substantial authority" standard)
   2. Fully substantiating a client's reasonable cause defense
4. Best use of the Independent Office of Appeals
5. Exploiting the IRS' failure to follow 6751(b)--the Graev defense
6. Using CDP hearings to abate penalties
7. Foreign informational return penalties (for example, Forms 5471, 5472, 3520, and 3520-A)
   1. Avoiding automatic assessments through the streamlined process
   2. Reasonable cause standard for foreign information reporting forms
   3. Litigation overview

The panel will discuss these and other relevant topics:

• Penalty abatement qualifying requirements
• Penalty non-assertion request to a late-filed return
• Using very subjective reasonable cause criteria
• Utilizing the Independent Office of Appeals
• Methods of calculating penalties
• Qualifying for the first-time abatement program

Learning Objectives

After completing this course, you will be able to:

• Recognize the penalty abatement qualifying requirements
• Identify how penalties are calculated
• Know how and when to assert reasonable cause or to establish an installment agreement
• Understand foreign information reporting penalties
• Discern when to use CDP hearings to abate penalties
• Differentiate estimated tax penalties from other tax penalties

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of Section 6651, 6655 and 6662 penalties imposed by the IRS.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).