Tax Administration: IRS Should Evaluate Penalties and Develop a Plan to Focus Its Efforts

Michael Brostek

dic 2009 · DIANE Publishing

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Civil tax penalties are an important tool for encouraging compliance with tax laws. It is important that the IRS administers penalties properly and determines the effectiveness of penalties in encouraging compliance. In response to a congressional request, the auditor determined: (1) whether IRS is evaluating penalties in a manner that supports sound penalty administration and voluntary compliance and, if not, how IRS may be able to do so; and (2) whether IRS's guidance for a new penalty for failure to disclose reportable transactions was issued in a timely manner and was useful to affected parties, and whether and how IRS has assessed the penalty. The auditor reviewed IRS documents and guidance, and interviewed IRS officials and tax practitioners.