NEW YORK – A task force of the American Institute of CPAs has told legislators that the system of civil tax penalties needs reform with better administration and oversight of penalty administration, a curb on the automated assessment of penalties, more training for Internal Revenue Service personnel and greater education of taxpayers and professional tax preparers.

The AICPA’s Penalty Reform Task Force, chaired by Rochelle Hodges, issued the report on Friday and cited the increase in automated assessment of penalties as a problem that leads to taxpayer dissatisfaction with the system. With more than 6 million taxpayers subject to automated penalties in 2008, many pay the levies rather than go to the expense of fighting them. Read more...