# Enrolled Agent Exam [Part 3] 36, Aiding Understatements and Other Civil Penalties

Page: https://stenobird.com/podcast/finance-exam-prep-7658413/enrolled-agent-exam-part-3-36-aiding-understatements-and-other-civil-penalties
Text version: https://stenobird.com/podcast/finance-exam-prep-7658413/enrolled-agent-exam-part-3-36-aiding-understatements-and-other-civil-penalties.md
Podcast: [Finance Exam Prep](https://stenobird.com/podcast/finance-exam-prep-7658413)
Published: 2026-09-10T22:41:20+00:00
Episode link: https://open-exam-prep.com/
Audio file: https://episodes.captivate.fm/episode/6b29dfc0-c856-48f5-b8d9-72c9a0c4d90b.mp3
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Duration seconds: 216

## Resource

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The IRC 6701 aiding and abetting penalty applies to anyone who knowingly assists in an understatement, with a $1,000 penalty for individual returns and $10,000 for corporate returns. - The IRC 6700 penalty for promoting abusive tax shelters is calculated based on the promoter's gross income derived from the activity. - A frivolous submission under IRC 6702 results in a $5,000 penalty for the taxpayer, but a practitioner who assists can be penalized under IRC 6701. - The IRS can seek an injunction under IRC 7407 to completely bar a practitioner from preparing tax returns for repeated misconduct. - A critical exam skill is distinguishing practitioner penalties (based on their actions) from taxpayer penalties (based on their understatement). For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

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## Transcript

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