Do away with unnecessary pain

IRS penalties are like being kicked in the stomach as you are trying to get off the ground after stepping in a hole and breaking your ankle. You really didn't mean to break your ankle and you didn't see the hole, but it happened, and now the IRS is going to come along and give you a swift kick because you fell down and broke your ankle.

Penalties are painful and come in many sizes and flavors. There's a failure-to-file penalty, failure-to-pay penalty, failure-to-deposit penalty, accuracy-related penalty, fraud penalty and others. Penalties can range from 100% of an asset value to 0.5% of tax due and can be applied concurrently, as a one-time assessment, or repeatedly, on a monthly basis.

But what if you are a conscientious taxpayer — you try to comply with all the tax rules and regulations, filing requirements and deposit requirements, but fall short. Should you have to pay a hefty fine for your oversight?