An article written by a Taxpayer Advocate Service Attorney Advisor is featured in the Spring 2019 issue of The Tax Lawyer, a tax law journal published quarterly by the American Bar Association. What’s Wrong with Strict Liability and Nonmonetary Penalties? The Case for Reasonable Fault-Based Civil Tax Penalties and Procedural Protections was authored by Eric LoPresti, a Senior Attorney Advisor to the National Taxpayer Advocate. 

The article suggests that coming up with an ideal penalty is not simple. Civil penalties for tax noncompliance need to be high enough to deter, but not so high that they are viewed as unfair. Some governments have turned to strict liability penalties and non-monetary penalties instead, but these alternatives have their own problems. For example, strict liability penalties apply to those who have taken reasonable steps to comply and non-monetary penalties can be disproportionate and have high social costs. Procedural protections can help to address these problems. The article concludes, however, that policymakers should look for ways reduce the opportunities for noncompliance so that compliance is the norm and penalties rarely need to be applied.

You can read an abstract of the article here or the full article here, courtesy of the American Bar Association.

Source: taxpayeradvocate.irs.gov