Question

If a taxpayer fails to comply with the due diligence requirements, how much can the IRS assess?

A) No assessment
B) Fixed penalty
C) Variable penalty
D) Double the owed tax

Answer 1

If a taxpayer fails to comply with the due diligence requirements, the IRS can assess a fixed penalty.

Step-by-step explanation:

If a taxpayer fails to comply with the due diligence requirements, the IRS can assess a fixed penalty. This penalty is typically a set amount that the taxpayer will be required to pay in addition to their owed taxes. It is important for taxpayers to meet the due diligence requirements to avoid this penalty.