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Meet the new 100% penalty.

The IRS is changing its procedures for administering the 100% penalty. New guidelines were expected to appear in the Internal Revenue Manual by the end of January and to take effect as of February 1. It is not known what effect the new guidelines will have on pending 100%-penalty cases.

Under IRC section 6672, the 100% penalty is assessed against "responsible" persons for willfully failing to pay trust fund taxes (generally payroll taxes).

Among other changes, the new guidelines

* Make clear the IRS will not assert the penalty against a non-owner employee with only administrative authority (such as a bookkeeper who is not an owner or an employee who signs checks but does not have discretionary authority to do so).

* Rename the penalty the "trust fund recovery penalty."

* State the penalty generally will not be asserted by the service against charitable organizations and volunteers.

* Give revenue officers the authority to accept offers in compromise (in accordance with new IRS guidelines to this effect).
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Title Annotation:Internal Revenue Service penalty
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Mar 1, 1993
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