SECTION 18. PENALTYFOR A

FAILURE TO TIMELY FILE A RETURN

Section 6651(a)(1) provides that for each month (or part thereof) a return is not filed when required (determined with regard to any extensions of time for filing), there is a penalty of 5 percent of the unpaid tax not to exceed 25 percent, absent reasonable cause. A taxpayer does not establish reasonable cause simply by engaging a competent Agent to file the taxpayer’s return. However, if the Agent has reasonable cause under § 6651(a) for failing to timely file the taxpayer’s return, the taxpayer will also have reasonable cause for that failure, and the failure-tofile penalty will be abated.