Tax
Aug. 4, 2022
Twenty percent: the initial income tax penalty
They violated the veterinary rule of tax planning: you can save taxes as a bull; you can save taxes as a bear; but you can’t save taxes as a pig.
The Internal Revenue Service ("IRS") has more than 100 penalties it can impose, and the California Franchise Tax Board ("FTB") has almost 100 penalties it can impose. One of the most common penalties each agency imposes is the accuracy-related penalty, sometimes referred to as the negligence penalty. A taxpayer will incur a 20% penalty on any "substantial understatement of income tax." That is defined as an understatement that exceeds the greater of ten...
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