Jeremiah Coder


This essay examines the historical use of penalties within the tax code, reviews a number of reports that led to the last round of significant penalty reform legislation, and considers existing problems of penalty administration. Several proposals are outlined to ensure that if and when Congress acts to simplify and revise the penalty regime, the reforms will have lasting impact. Part II covers the growth of penalties in the tax system from its original simple form through its significant expansion to the time that the IRS and Congress worked to cut back the complexity of the civil tax penalty regime in the late 1980s. Part III considers how legislative actions over the past decade have created new penalties that stand out from the outlined policy goals of the IRS Task Force, and the resulting negative impact on administering the tax code. Part IV looks at possible reforms to the penalty system that would institute measures to help constrain penalties from drifting from defined policy goals.

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