Lynda ArtesaniLegal Accountant and Data Migration Specialist at The Proper Trust

Beware - No Cap on Penalties for Intentional Tax Non-Compliance!

15 Nov 2024 · 1 min

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0:33

In this brief discussion, the speakers clarify a key tax compliance rule: when a taxpayer intentionally disregards tax obligations, all statutory penalty caps are removed, exposing them to unlimited penalties. They contrast this with situations where a taxpayer makes a good‑faith effort to comply—even if imperfectly—which can keep penalties within capped limits. The conversation emphasizes the importance of recognizing the intentional element, as it determines whether penalty caps apply.

Under the regulations, if it's intentional disregard, there is zero cap on penalties. Wow.
Oh, ow, ow, ow. That's that right there. Can you just stress that?
That's the big thing. If you know you're supposed to do it, try. Yeah. Even if you do it wrong, at least now you've capped your penalty risk. Wow. But if you don't know you're supposed to do it, you're— so again, right, that's the intentional part of intentional disregard. If you intentionally disregard, all penalty caps are gone.