Penalties on tax shelter promoters.
AJCA Section 818 modifies Sec. 6700's penalty amount to 50% of the gross income the person derives from the activity for which the penalty is imposed. The penalty applies to any activity that involves a statement on the tax benefits of participating in a plan or arrangement if the person knows or has reason to know that the statement is false or fraudulent. The new penalty rate does not apply to gross valuation overstatements.
The new penalty rate is effective for activities after Oct. 22, 2004.
FROM PAUL MANNING, WASHINGTON, DC
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|Publication:||The Tax Adviser|
|Date:||Jan 1, 2005|
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