Posted by Jonathan Adler:
Tax Penalties as Health Reform:
http://volokh.com/archives/archive_2009_08_23-2009_08_29.shtml#1251206908
James Peasley [1]uncovers another goody buried in the House health
care reform bill: Strict liability for accidental underpayment of
income taxes.
Under current law, taxpayers who lose an argument with the IRS can
generally avoid penalties by showing they tried in good faith to
comply with the tax law. In a broad range of circumstances, the
health-care bill would change the law to impose strict liability
penalties for income-tax underpayments, meaning that taxpayers will
no longer have the luxury of making an honest mistake. The ability
of even the IRS to waive penalties in sympathetic cases would be
sharply curtailed.
The proposed changes in penalty rules have largely escaped notice
because they are buried in a part of the bill that purports to deal
with abusive tax shelters. They are barely mentioned in the Ways
and Means Committee summary. Their inclusion in the bill
underscores the need to read it closely. If anyone had doubts about
the value of loading the text of the bill into a wheelbarrow and
bringing it to the beach this August, the proposed changes to tax
penalties should dispel them.
Of course, it would be silly to expect legislators to actually [2]read
the whole bill before they vote for it (that would prevent them from
blaming the IRS for enforcing the law as Congress enacted it).
References
1.
http://online.wsj.com/article/SB10001424052970203550604574358882642883214.html
2.
http://www.volokh.com/archives/archive_2009_06_28-2009_07_04.shtml#1246236289
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