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Frivolous submissions, fraud and taxpayer penalties

SEE 3 Chapter 8 · IRS outline 1C3, 1C4, 1D2

A new walk-in, Glen Harper, arrives with a $5,000 penalty notice and a binder of internet theories about why wages are not income. Later that week Daniel asks what happens if a deduction is disallowed, and Copperline files late. Each case is a different penalty with its own trigger, rate and defense. This chapter lines them up so Theo can tell a 20% penalty from a 75% one at a glance, and knows the arithmetic behind each.

In this chapter

1. Frivolous returns
2. Frivolous submissions and the 30-day escape
3. Avoidance, evasion and the badges of fraud
4. The 20% accuracy-related penalty
5. 40%, 75% and other penalties on the taxpayer
6. Failure to file and failure to pay

This chapter has 6 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Frivolous returns and submissions
• tax avoidance and evasion
• negligence, substantial understatement and valuation penalties
• fraud penalty
• failure to file and pay

Chapter 7: Sanctionable conduct and the Office of Professional Responsibility · Chapter 9: Preparer penalties, signatures and records