Taxpayers are liable for penalties related to the inaccuracies in their tax returns, but reliance on professional tax advice is a factor in determining applicability of any penalty. An evaluation of how the standards are applied by the IRS and the courts shows that the authorities differ. While the courts typically excuse taxpayers who, in good faith, follow professional tax advice, the IRS has a higher standard for the taxpayer. This article looks into how the courts interpret good faith and reasonable cause in instances where a negligence penalty has been levied by the IRS.
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