Taxpayers received a Form 1099-MISC reporting $3.4 million in income. This income item never made it to the income tax return. The IRS noted the missing item and assessed tax on it, and an accuracy-related penalty under Code §6662(a) of $104,295. That Code section imposes a 20% penalty on substantial understatements of income tax.
The taxpayers had engaged a specialty firm to prepare their income tax return. The return was over 115 pages long, and involved the integration of 160-plus information returns.
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Finance & Banking Updates, Tax Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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