TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, August 29, 2009

AICPA Urges Civil Tax Penalty Reform

AICPA The American Institute of Certified Public Accountants yesterday submitted a 20-page report to Congress, the Treasury Department, and the IRS, Report on Civil Penalties: The Need for Reform:

We are writing to express our concerns about the current state of civil tax penalties and to offer some suggestions for improvement. Specifically, we address the following issues:

  • The trend away from voluntary compliance as the primary purpose of civil tax penalties;
  • The lack of clear standards in some penalties;
  • The fact that some penalties are disproportionate both in amount and severity;
  • The fact that some penalties are overbroad, deter remedial and other good conduct, and punish innocent conduct;
  • The trend toward strict liability;
  • An erosion of basic procedural due process;
  • Inconsistencies between penalty standards and the role of tax professionals;
  • The increase in automated assessment of penalties that can lead to unwarranted assessments;
  • The need for better coordination and oversight of penalty administration;
  • The bias in favor of asserting penalties;
  • The need to improve internal IRS guidance and training; and
  • The need for the IRS to increase its efforts to educate taxpayers and tax professionals.

See also cover letters to Congress and to the Treasury Department and IRS.

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You know the IRS is starting to do some good when they are able to get the AICPA to squeal like this. Closing the tax gap, not the tax gaap.

Posted by: Mark Vogeloney | Aug 29, 2009 5:40:38 PM