{"id":28354,"date":"2017-09-19T02:27:36","date_gmt":"2017-09-19T02:27:36","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=28354"},"modified":"2020-04-28T14:01:57","modified_gmt":"2020-04-28T19:01:57","slug":"tax-dictionary-substantial-understatement-penalty","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/tax-dictionary-substantial-understatement-penalty\/","title":{"rendered":"Substantial Understatement Penalty"},"content":{"rendered":"<h2>IRS Definition<\/h2>\n<p>The substantial understatement component of the accuracy-related penalty provides for a dollar criteria. If the understatement exceeds the greater of 10% of the tax required to be shown on the return, or $5,000 ($10,000 for corporations other than S corporations or personal holding companies), the penalty applies.<\/p>\n<h2>More from H&amp;R Block<\/h2>\n<p>If you understate the tax on your return by 10% (or more) of what you should have reported &#8212; or if the understated amount is more than $5,000, the IRS can charge a substantial understatement accuracy penalty.<\/p>\n<p>If you can show that you made a reasonable attempt to report the correct tax, the IRS typically doesn&#8217;t charge the 20% substantial understatement penalty.<\/p>\n<p><a href=\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/irs-penalties\/\">Learn how to address IRS penalties<\/a>, or <a href=\"https:\/\/www.hrblock.com\/tax-offices\/extended-tax-services\/tax-audit\/audit-support.html\">get help from a trusted IRS expert<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IRS Definition The substantial understatement component of the accuracy-related penalty provides for a dollar criteria. If the understatement exceeds the greater of 10% of the tax required to be shown on the return, or $5,000 ($10,000 for corporations other than S corporations or personal holding companies), the penalty applies. More from H&amp;R Block If you [&hellip;]<\/p>\n","protected":false},"author":605,"featured_media":33644,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,51],"tags":[],"class_list":["post-28354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-audits-and-tax-notices"],"acf":[],"yoast_head":"<title>Tax Dictionary - Substantial Understatement Penalty | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"Learn about the IRS penalty for substantial understatement of tax. 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