Making a lot of money is no excuse for keeping bad records. And failing to give adequate documentation to your CPA takes away your ability to avoid the negligence penalty.
That’s what Joseph A. Deihl found when the court ruled that he had to shell out about $5 million in taxes and over $1 million in penalties. On top of this $6 million, Deihl paid fees to his lawyers, who participated in rendering well over a thousand pages in stipulated exhibits placed before the court. In addition, Deihl had to pay penalties for underpayment of taxes and interest on the $5 million in taxes.
The penalties and interest relate to the period of underpayment. Deihl’s case covered 1996, 1997, and 1998, but the court did not make its ruling until December 2005. Thus, Deihl’s penalties and interest problems started in 1996. That’s ... Log in to view full article.