The IRS Tax Penalties on the Rise, Particularly Employment Tax Penalties

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Jason B. Freeman

Jason B. Freeman

Managing Member


Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine, a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

The IRS recently issued its annual Data Book, providing a glimpse into the world of tax administration during the past fiscal year.  The recent release provides a number of interesting takeaways, but here are a few of the highlights:

It’s always interesting to see how the civil penalties break down.  Based on the data, approximately $12 billion in penalties were assessed against individuals and estate and trust income returns during FY 2016.  There were close to $2.2 billion in civil income tax penalties assessed against businesses and over $6 billion for employment taxes.  Other penalties related to excise taxes and estate and gift taxes.

So how does this compare to prior years?  Well, it marks an increase in the total amount of civil penalties assessed overall.  Most notably, it marks a nearly 40-percent increase in the amount of employment taxes assessed.  That statistic is consistent with recent anecdotal information and the government’s reprioritization of employment tax enforcement.

For other posts related to the uptick in employment tax enforcement, which is largely confirmed by the recently-released data, see:

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