Bryan C. Skarlatos chaired the program "Nuts & Bolts of Tax Penalties: A Primer on the Standards, Procedures & Defenses Relating to Civil & Criminal Tax Penalties" at the Practising Law Institute

The number of accuracy-related penalties assessed against individual taxpayers increased from 58,366 in 2005 to 553,184 in 2015. That is nearly a 1,000% increase over the past decade! Are there more bad taxpayers? Or, is the IRS just getting more aggressive about asserting penalties? Regardless of the answer, responsible tax practitioners must understand what triggers a penalty assessment and how to protect their clients and themselves against such assessments. Unfortunately, accounting and law school tax classes rarely focus on penalties, leaving practitioners to pick up the relevant standards and procedures from the trial and error of daily practice.  

This one-day seminar was a unique opportunity to review the various tax penalties that can be imposed, the standards and transactions that can trigger penalties and sanctions, the procedures the Internal Revenue Service must follow to assess penalties and the defenses that can be asserted.  An expert faculty of experienced private practitioners and government representatives were present to explain how penalties work, why they are assessed and how you can protect yourself and your clients. 

Topics Included:

• Understanding why penalties are assessed, which penalties apply to what types of conduct, and who can be 
   subject to penalties, the taxpayer, the preparer, or both 
• How certain you have to be before you can advise a client to take a tax position on a return
• Learning to recognize when you can rely on your client for information and when you have to dig deeper
• Exploring the difference between professional ethical standards of conduct, Circular 230 standards and tax 
• Examining situations where conduct is so egregious that it can trigger a fraud penalty
• Discovering what turns a civil penalty case into a criminal tax prosecution
• Tips on approaching tax situations that involve potentially criminal conduct

Those in attendance included law firm and accounting firm professionals who advise clients on structuring transactions and who represent clients in tax controversies; in-house tax professionals involved in tax planning, FIN 48 determinations and tax audits and appeals; and government agents and attorneys who wanted a primer on tax penalties and ethical standards.