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The most insidious aspect of the old understatement penalty, at least from a taxpayer's point of view, was the way in which it could be stacked with other penalties.
6662 applies to the portion of an underpayment attributable to a substantial income tax understatement.
For disclosed transactions, in general, a 20-percent accuracy-related penalty is imposed on any understatement attributable to an adequately disclosed listed transaction or reportable transaction.
Companies may have a harder time avoiding the accuracy-related penalties for substantial understatements of income tax that relate to relatively routine corporate tax planning initiatives -- tougher standards may apply to understatements attributed to "tax shelters.
those owning directly or indirectly more than 10 percent of the corporation or a related corporation) or employees engaged in excluded activities, subsection 15 of the third-party civil penalty legislation is intended to exempt "employees" of a corporation from penalties where there is an understatement of a corporation's tax liability arising from a corporation's "culpable conduct.
However, some appeals courts have found that the test for erroneous deductions should be whether the spouse seeking the relief knew or had reason to know the deduction would give rise to a substantial understatement (Price v.
Rather, the failure to disclose jeopardized the taxpayer's ability to claim that an income tax understatement resulting from the undisclosed transaction was due to reasonable cause, and that the taxpayer acted in good faith.
To say Pepperdine has been waiting eagerly for its critical rematch against Gonzaga tonight would be an understatement.
During the meeting, TEI emphasized that, merely by performing their day-to-day duties, many employees could be subject to personal liability for enormous penalties in the range of millions of dollars for understatement of tax on a corporate return.
In the process of rendering these services, the firm allegedly committed an error that resulted in understatement of the corporation's liabilities and overstatement of sales.
To say that GM is bending over backwards to sell cars in general and cars with navigation systems in particular is an understatement," said Phil Magney, principal analyst of Telematics Research Group.
6662(d)(1) provides that there is a substantial understatement of income tax if the understatement exceeds the greater of 10% of the tax required to be shown on the return for the tax year, or $5,000 ($10,000 for a corporation other than an S corporation or a personal holding company).