TRP Penalties

Question 1

What is the penalty for failing to pay?

Answer 1

1/2% per month

Question 2

What is the penalty for aiding and abetting in the understatement of a client’s tax liability?

Answer 2

$1000 or $10,000 for Corporations

Question 3

What is the penalty for disclosing client supplied information without authority?

Answer 3

$250

Question 4

What is the penalty for substantial valuation misstatement?

Answer 4

20%

Question 5

What is the negligence penalty with respect to an understatement of tax?

Answer 5

20%

Question 6

What is the penalty for failing to file a partnership or S corporation?

Answer 6

$235 per month

Question 7

What is the penalty for failing to furnish the tax identification number of the tax return preparer?

Answer 7

$60

Question 8

True or False

There is no penalty for failure to make estimated income tax payments

Answer 8

False

Question 9

What is the penalty for substantial underpayment of tax?

Answer 9

20%

Question 10

True or False

There is a penalty for preparing or signing a tax return when the practitioner does not have a PTIN

Answer 10

True

Question 11

What is the penalty for endorsing/negotiating a client’s refund check?

Answer 11

$635

Question 12

What is the penalty for failing to provide the client a copy of his/her tax return?

Answer 12

$60

Question 13

True or False

There is an earned income penalty

Answer 13

True

Question 14

What is the penalty for failing to file?

Answer 14

5% per month

Question 15

What is the penalty for failing to sign a tax return or refund claim?

Answer 15

$60

Question 16

What is the penalty for failing to be diligent in determining a client’s eligibility for the earned income credit?

Answer 16

$635

Question 17

What is the penalty for failing to retain records properly?

Answer 17

$60

Question 18

What is the penalty for failing to correct information returns?

Answer 18

$60

Question 19

What is the penalty for understating a client’s tax liability due to an unreasonable tax position?

Answer 19

$1,000 or 50%

Question 20

What is the penalty for understating a client’s tax liability due to willful or reckless misconduct and negligent or intential disregard of tax rules?

Answer 20

$5,000 or 75%

Question 21

True or False

The penalty for failure to file information returns does not apply to the extent that the failure is due to reasonable cause and not due to willful neglect.

Answer 21

True