How is the penalty computed where a single group return is filed using the combined report method?
The penalty for each taxpayer in the combined group is computed by determining each taxpayer’s understatement of tax, and then applying the 20 percent penalty to that amount. This is similar to the way the tax liability is computed when a single group return is filed using the combined report method. The penalty liabilities of the electing group members are then aggregated and reported on a group basis.
Related Questions
- If a unitary group files a single group return using the combined reporting method, how do the unitary members compute the $1 million understatement of tax threshold?
- How is the penalty computed where a single group return is filed using the combined report method?
- When an Unsafe report is filed, is an ECB violation issued? Will a penalty be imposed?
