Penalties Feed

You've probably seen the commercial where the tax preparer mentions a client who hadn't filed returns for eight years. It happens. There are lots of excuses reasons for not filing taxes. There also is a big reason for taking care of your delinquent tax duties: Penalties. That was a recurring theme when I asked tax professionals via Facebook and Twitter what advice they give folks who've neglected to file returns. "I make sure they understand the potential seriousness, i.e., criminal penalties, and emphasize the need to deal with it ASAP since it only gets worse," says Diane L. Gilabert, aka... Read more →

Did you get so caught up in the fiscal cliff fight and the subsequent tax rate changes for 2013 that you almost forgot that our first tax deadline of the new year is almost here? Me, too. But tax time marched on and tomorrow, Jan. 15, is the due date for the final estimated tax payment of 2012. Dealing with estimated taxes also is today's Daily Tax Tip. The good news is that when it comes to 1040-ES forms and payments, either by check or money order payable to the U.S. Treasury, the Internal Revenue Service uses the same "timely... Read more →

The tax world consensus is that if Mitt Romney doesn't win the White House, he'll amend his 2011 return to recoup the tax savings he surrendered in order to make his effective tax rate reach 14.1 percent. Some calculators say that the Republican presidential candidate's tax rate would have been closer to 9 percent if he'd taken all the deductions for which he qualified. When asked if Romney might file an amended return and claim the $1.77 million in charitable donations that he and the missus didn't include on their Schedule A, thereby getting a nice refund check of around... Read more →

College football fans are all abuzz about the NCAA penalties handed down today again Penn State University. As in most things sports, and especially at the ultra-emotional college level, the reactions from opposing sides are loud and clear. The boos from Penn State apologists include the complaint that NCAA President Mark Emmert has overstepped his authority, inserting the college sports oversight body into criminal proceedings. Worse, they say, he didn't wait until all legal action has run its course. And, argue Penn Staters, the penalties will punish not those who committed unspeakable crimes, but current and future Happy Valley students... Read more →

If the weather isn't too hot where you are, take a walk today in honor of Henry David Thoreau. He was born on July 12, 1817. Thoreau is known by most as the author of "Walden," also often referred to as "On Walden Pond." The book was the product of Thoreau's stay in a cabin at Walden Pond, now part of Massachusetts' Walden Pond Reservation, from July 1845 to September 1847. Because of Thoreau's legacy, Walden Pond has been designated a National Historic Landmark and is considered the birthplace of the conservation movement. But Thoreau was more than just a... Read more →

As soon as the Supreme Court's health care ruling, and by Supreme Court I mean Chief Justice John Roberts' swing vote and majority opinion, was issued, thousands of us started scouring not only legal documents, but also dictionaries. We're all looking for some clarity on taxes vs. penalty charges. A tax generally is defined as a government levy to raise money to run said government and the public goods and services it provides. A penalty typically is a punishment imposed for violating a law. Then we have penalty tax, which says is a local or federal punitive tax applied... Read more →

EITC, corporate estimated tax and inmate information included in new trade laws

When Obama this morning signed the recently passed trade bills with South Korea, Colombia and Panama, not only did laws affecting commerce between the United States and those countries go on the books, but also some new tax laws. Costlier EITC errors for preparers: As part of the U.S.-Korea Free Trade Agreement Implementation Act, the due diligence penalty that can be assessed tax return preparers in connection with erroneous Earned Income Tax Credit (EITC) claims goes from $100 to $500. This fine applies to each instance where a tax professional doesn't adequately check whether a client is indeed eligible for... Read more →

I admit it. I didn't do much of anything yesterday. I was glad April 18 was over, even though I filed for an extension and will be working on our 1040 in the coming weeks. What about you? Did you get your return (or Form 4868 extension request) filed on Monday? No? So what now? Don't panic, but don't delay. Penalty charges are adding up: Penalties and interest are accumulating as I type and you read. The current IRS interest rate isn't so bad, but depending on how much you owe, the penalties could quickly add up. You can put... Read more →

IRS files tax lien against Al Sharpton

The Rev. Al Sharpton usually gets headlines for events that he stages. This time, though, the attention is not the kind that anyone wants. The IRS this week filed a $538,652 lien against Sharpton in connection with what Uncle Sam says are unpaid taxes assessed in 2009. Sharpton's lawyer, Michael Hardy, told the Detroit News' Tax Watchdog column that he and the political activist are confused by the IRS action. Hardy said the pastor was granted an extension to file his 2009 taxes by Oct. 15. "It's kind of odd. I totally don't understand why they would file a lien... Read more →

Sorry, people. It doesn't matter that other people used tax software and ended up filing incorrect returns, even if one of them is the Secretary of the United States Treasury. It's still your, other taxpayers' and Treasury Secretary Timothy Geithner's ultimate responsibility to properly calculate and file your taxes. When you don't, regardless of who you are and which tax filing method you used, the IRS is well within its rights to demand that you pay your accurate tax bill and any associated penalties that errors might have caused. The TurboTax excuse: You remember the Geithner case. During his Senate... Read more →

Aaron Zeff had no idea he was a tax delinquent until two IRS agents showed up last week at his Sacramento car wash. The amount the IRS says Zeff didn't pay back in 2006: 4 cents. So the IRS sent two people to collect four pennies? Actually, the bill was a bit bigger. Over the last four years the unpaid tax debt had grown to $202.35 thanks to interest and penalty fees. Zeff thought he had paid all taxes due from his business, Harv's Car Wash. And he has no idea how that 4 cents the IRS says he didn't... Read more →