— This is a technical and educational piece — The IRS consistently assesses different type of penalties. In 2017 the IRS assessed nearly 39 million civil penalties totaling roughly $26.5 billion, the IRS abated 4 million civil penalties totaling $12.6 billion. More than 80% of civil penalties were assessed against individuals, estates, and trusts for income taxes. Taxpayers asking why me, why more penalties, and can I get rid of them or abate them? Purpose of tax penalties: Penalties exist to encourage voluntary compliance by supporting the standards of behavior required by the tax code. I.R.M., pt. 20.1.1.2 (Nov. 21, 2017) Growth of penalties: more than 150 civil penalties, additions to tax, and additional taxes authorized, more than 10 fold increase from the 13 penalties in the 1954 version of the Code, anecdotal evidence suggests the IRS asserts penalties more frequently than in the past. Civil tax penalties and additions to tax: Additions to tax – Failure…
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