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Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

While we all know that false advertising is shady and untrustworthy to the general public, institutions like the IRS do not take lightly to matters regarding false advertising in debt relief services. Last month, the IRS Office of Professional Responsibility (OPR) monetarily penalized a tax practitioner for false advertising, in the form of a percentage of the gross income from the misconduct.

Essentially, a tax firm created false advertising to mislead potential clients in believing the firm had “successfully helped thousands of taxpayers and employed multiple attorneys, enrolled agents, CPAs, and former IRS employees,” when the firm only employed one enrolled agent. The advertising also led potential clients to believe that employing a private firm was the only way for taxpayers with back taxes to resolve their issues without going to tax court. The result ended with the practitioner facing five years of probation, 12 month suspension of practice, and the threat of potentially losing practice privileges before the IRS.

The suit cited Circular 230 which dictates rules of professional conduct and a code of regulations. All parties who practice before the IRS, including attorneys, CPAs, and agents must abide by the rules set forth by it.

While we all know the IRS is all business, rulings like this remind us of just how much power the IRS has, and how much it is ready to penalize you should you cross it’s guidelines. This isn’t the first time the IRS has taken action against delinquents, and it certainly won’t be the last. Here are some common IRS penalties you should be aware of:

  1. Failure to pay

We all know we have to pay our taxes by tax day, usually on April 15th (except for this year!), or you may be in trouble with the IRS for paying late or not filing at all. If there was a good reason for filing late/not paying, such as death, serious illness or injury, or incapacitation, you can probably cite these as a reason for why you were not able to. If you don’t have a good reason, you may still be able to receive an FTA, or First Time penalty Abatement that, despite its name, can be used more than once so long as it is not used within 3 years of the last time it was used.

  1. Tax miscalculation

If you do your own taxes, tax miscalculation is what you fear most. The last thing you want to hear, months after filing your taxes, is that you’ve received a penalty for miscalculation. Your best route is consulting a tax professional that can help you find the best defense, or see if the IRS themselves had messed up their calculations

  1. Filing Inaccurately

The IRS does not turn a blind eye to those who severely understate their tax or provide negligent reporting. These kinds of penalties can be the most severe, especially by repeat offenders. A tax professional can help you resolve these matters, and help defend your interests.

Contact a tax expert if you find yourself in hot water with the IRS.