Video: Taxpayer Penalties

In this lesson, Nick Palazzolo, CPA, delves into the maze of taxpayer penalties, offering clarifications on the consequences of noncompliance with tax laws. Nick walks through various penalties, such as those for fraudulent claims of credits like the Earned Income Credit, failures to file, and insufficient estimated tax payments. He discusses the severity of penalties for actions like negligence, substantial understatement of tax, substantial valuation misstatements, and fraud. With real-world examples, Nick breaks down how these penalties are calculated, illustrating the importance of understanding and adhering to tax regulations. Additionally, Nick emphasizes the role of the IRS in enforcing compliance and the difference between the taxpayer's and IRS's burden of proof in matters of fraud. The practical examples coupled with concrete percentage and dollar figures serve as a crucial resource to grasp the weight of these monetary penalties in tax law.