When a photo-finish shows a horse wins a race because his nose crosses the finish line first, I do not regard the losing horse as losing by a "substantial" amount.
A few years ago, government officials losing sleep because of not having enough revenue, dreamed up this idea of creating a penalty for those who under-report their revenue by a "substantial" amount.
Last year I fought a "substantial" penalty with an auditor over $30,000 worth of bank deposits when the taxpayer reported $1.5MM in revenue. The bank showed this $30,000 that the customer didn't know was borrowed or whatever, and IRS didn't know either until further queries from the bank itself. This understatement of 2% was deemed to be "substantial" underreporting. I had to give in to this $5000 ding in compromise to win $27K on another issue.
Another client was assessed (on a nasty letter) a "substantial" penalty over a $600 K-1 not reported in the midst of $150,000 of mainstream income.
Am I misunderstanding because I believe in Webster definitions? Or is the govt straining at the furthest imagination to ring up the cash register?
A few years ago, government officials losing sleep because of not having enough revenue, dreamed up this idea of creating a penalty for those who under-report their revenue by a "substantial" amount.
Last year I fought a "substantial" penalty with an auditor over $30,000 worth of bank deposits when the taxpayer reported $1.5MM in revenue. The bank showed this $30,000 that the customer didn't know was borrowed or whatever, and IRS didn't know either until further queries from the bank itself. This understatement of 2% was deemed to be "substantial" underreporting. I had to give in to this $5000 ding in compromise to win $27K on another issue.
Another client was assessed (on a nasty letter) a "substantial" penalty over a $600 K-1 not reported in the midst of $150,000 of mainstream income.
Am I misunderstanding because I believe in Webster definitions? Or is the govt straining at the furthest imagination to ring up the cash register?
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