My 2011 tax return was audited. I provided the IRS with everything with the exception of documentation for my cash contribution. The auditor tried to assess me with fraudulent filing penalties. I appealed it and went to examination. Providing the same thing except the documentation for the cash contribution, the appeals officer assessed the penalties. I've provided nothing fraudulent. I just kept bad records for cash contributions. I filed an amendment and paid the difference of $861 removing the contributions and it was rejected and the check not cashed. I am waiting on the Notice of Deficiency. Question is does the examiner have the authority to assess fraud penalties without a judge approving it? If so I am going to tax court. If not what is the next step?