Robert W. Wood, of Forbes, has have made available for download his article, IRS Can Levy Penalties—Even After You’re Dead, published in Forbes. The article begins is as follows:
Does the IRS like to impose penalties? It must, since IRS penalties have a way of creeping into many tax notices, even for innocent mistakes. You might think that if you weren’t trying to cheat on your taxes and just made a mistake, it would be OK. Taxes are complex, and mistakes happen, but the burden is on you to show that you acted reasonably. Relying on professional tax advice can be one way, but if you can’t convince the IRS, you will probably end up with penalties. The size of penalties varies, but they often land around 25% of the taxes in question. However, if the IRS believes you were trying to cheat, you could face a civil penalty of 75% or in extreme cases, even criminal prosecution. Surprisingly, most criminal tax cases start with regular civil audits. The IRS may discover something fishy-including how you respond in the audit and whether you are evasive—and refer it to the criminal part of the IRS. There are plenty of special penalties, and some of them are of astounding size. A good example is penalties for failing to disclose a foreign bank account. As an American citizen or green card holder, of course, you must report your worldwide income, and that includes interest income from bank accounts overseas.
Click here to view Robert W. Wood’s summary of IRS Can Levy Penalties—Even After You’re Dead
Posted by Josh Saret, Associate Editor, Wealth Strategies Journal.
Wealth Strategies Journal 