Procedures Issued for Reducing Unpaid Frivolous Return Penalty

The IRS has issued procedures in Revenue Procedure 2012-43 concerning under what circumstances a frivolous tax submission penalty would be reduced. The procedure also details how a taxpayer may request a reduction in the penalty, which is assessed under Code Sec. 6702(a) or Code Sec. 6702(b), and the eligibility requirements for reduction.

If a taxpayer satisfies all eligibility criteria of Section 4 of the procedure including filing all tax returns and paying all outstanding taxes, penalties (other than under Code Sec. 6702 ) and related interest, the IRS will generally reduce all unpaid Code Sec. 6702 penalties assessed against that person to $500.

This revenue procedure became effective November 5.


IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.