“Negligence” includes (but is not limited to) any failure to:

  • make a reasonable attempt to comply with the internal revenue laws

    • exercise ordinary and reasonable care in preparation of a tax return or

    • keep adequate books and records or to substantiate items properly

This penalty may be asserted if you carelessly, recklessly or intentionally disregard IRS rules and regulations – by taking a position on your return with little or no effort to determine whether the position is correct or knowingly taking a position that is incorrect. You will not have to pay a negligence penalty if there was a reasonable cause for a position you took and you acted in good faith.

Penalty for negligence and disregard of the rules and regulations

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