There are about 130 civil penalties in the Internal Revenue Code. That seems like far too many to me. Too many penalties can cause them to not be as effective - people can't possibly know of them all - including Revenue Agents. This is an area that has been studied extensively over the past 12 years, but no actions have been taken.
I've got a short article that notes the numerous studies on penalty problems and the need for reform and summarizes some of the key problems and solutions. It is from this week's AICPA Tax Insider - here.
Penalty reform is one of the many areas where it is time to "stop studying and act" (as I've noted before in a Tax Notes article)
What do you think? How would you fix this monstrosity of a compliance and enforcement tool?
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