H.R.5550 - Penalty and Interest Reform Act of 2002107th Congress (2001-2002)
Summary: H.R.5550 — 107th Congress (2001-2002)
Penalty and Interest Reform Act of 2002 - Amends the Internal Revenue Code (Code) to move failure to pay estimated tax penalty provisions from chapter 68 (Additions to the Tax, Additional Amounts, and Assessable Penalties) to chapter 67 (Determination of Interest Rate; Compounding of Interest) of the Code while converting such current tax penalty provisions into interest provisions. Exempts from the interest penalty an underpayment of less than $2,000.
Introduced in House (10/03/2002)
Excludes from gross income interest paid on any tax overpayment by individuals.
Abates interest with respect to: (1) an erroneous refund check without regard to the refund amount (currently $50,000); and (2) taxpayer reliance on written erroneous Internal Revenue Service (IRS) advice.
Permits making cash bond deposits to offset potential tax underpayments.
Applies the interest netting rules without regard to the 45-day period for individuals.
Waives certain penalties for first-time unintentional minor errors for individuals.
Establishes a civil penalty, in addition to other penalties provided by law, for certain frivolous tax submissions. Directs the IRS to prescribe a list of frivolous submissions. Gives a person an opportunity to withdraw such submission upon notice by the IRS.