IRS Beefs up Penalty Regulations

The Internal Revenue Service has issued proposed regulations that provide rules for assessing penalties against tax advisors who fail to file a true and complete tax return on a timely basis.

REG-160872-04 contains proposed regulations under Section 6707 of the Tax Code and the failure to furnish information regarding reportable transactions. The regulations implement the amendments to Section 6707 by the American Jobs Creation Act and promote material advisors’ compliance with the regulations under Section 6111. These regulations affect material advisors responsible for disclosing reportable transactions.

Separately, the IRS issued TD 9436, which contains final regulations implementing amendments to the tax return preparer penalties under Sections 6694 and 6695 of the Tax Code and related provisions under other sections of the Code. They reflect amendments to the code made by Section 8246 of the Small Business and Work Opportunity Tax Act of 2007 and Section 506 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.