Enrolled Agent Exam [Part 3] 36, Aiding Understatements and Other Civil Penalties

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.

In this episode you will learn:

- The IRC 6701 aiding and abetting penalty applies to anyone who knowingly assists in an understatement, with a $1,000 penalty for individual returns and $10,000 for corporate returns.

- The IRC 6700 penalty for promoting abusive tax shelters is calculated based on the promoter's gross income derived from the activity.

- A frivolous submission under IRC 6702 results in a $5,000 penalty for the taxpayer, but a practitioner who assists can be penalized under IRC 6701.

- The IRS can seek an injunction under IRC 7407 to completely bar a practitioner from preparing tax returns for repeated misconduct.

- A critical exam skill is distinguishing practitioner penalties (based on their actions) from taxpayer penalties (based on their understatement).

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