Penalties In Modern Tax Practice

"In 1955, there were approximately 14 penalty provisions in the Internal Revenue Code. There are now [in 2011] more than ten times that number." Internal Revenue Manual ("IRM") part 20.1.1.1.1.

Whenever I am asked why it is that I speak so often about penalties, I highlight the above quote from the IRS's employee handbook. Whereas there were 14 penalty provisions in 1955, approximately 150 were listed by 2011; there are even more now, 13 years later. But it's not just the sheer number of penalties contained in the Internal Revenue Code (the "Code") that makes penalties more relevant now than ever before; it's the IRS's enforcement of those provisions.

I have enough gray hair to credibly say that, when I first started practicing tax controversy, getting penalties abated on grounds of reasonable cause often took little more than some magic citations and a heartfelt "please?" I'm not sure how, 20 years later, we find ourselves in a place where even the