I was looking at the President's 2012 budget submission, and one thing that caught my eye was a proposed revenue enhancer for penalties from paid tax preparers for failure to do due dilligence for EITC claims. The budget estimates $13 million from this in 2012 going up to $37 million in the out-years. That sounds awfully optimistic on the administration's part. I don't know how the penalty would be computed, but could it really amount to that much?
scott s. ..
The current penalty for failing to perform due diligence on returns with EITC is $100 per return. The budget proposes to change that to $500 per return. Given the total number of returns with EITC (24.8M in 2008) the budget estimate does not sound unreasonable.
Yes, based on those numbers they expect to impose the penalty on just slightly over one return in 1,000 in the first year.
Have something to add? Share your thoughts — no account required.
Ask the community — no account required