IRS Revises Delinquent International Information Return Submission Procedure (DIIRSP)

- By : Parag Patel

…information returns through normal filing procedures. Penalties may be assessed in accordance with existing procedures. All delinquent international information returns other than Forms 3520 and 3520-A should be attached to…

New IRS Disclosure Program Announced for Non-Resident Taxpayers: Streamlined Foreign Offshore Procedures

- By : Parag Patel

…instructions outlined below will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties. Even if returns properly filed under these procedures are subsequently…

Form 3520 Penalty Relief

- By : Parag Patel

…the late filing of Forms 3520 and 3520-A, which will take somewhat longer to process. If the IRS has assessed penalties, they will be removed, and if a request for…

Method to Cure Delinquent or Incomplete Foreign Information Returns Without Penalties

- By : Parag Patel

…Foreign Corporation • Form 3520, Annual Return to Report Transactions with Foreign Trusts & Receipt of Foreign Gifts • Form 3520-A, Annual Information Return of Foreign Trust With a U.S….

A Lesson to be Learned from US v. Schwarzbaum: Bring Back the Foreign Funds to Pay FBAR Penalties

- By : Parag Patel

…was filed against him. After a trial, the district court found Schwarzbaum liable for willful FBAR penalties and issued a judgment for about $12 million in penalties plus late payment…

The New IRS Voluntary Disclosure Practice: Not a Good Deal for Noncompliant Taxpayers

- By : Parag Patel

…the old Offshore Voluntary Disclosure Program (OVDP), taxpayers do not receive automatic protection against criminal/civil penalties and the IRS has wide discretion to impose penalties based on the taxpayer’s level…

Detailed Technical Comments and Recommendations to the IRS on Proposed Regulations for Form 3520 and Code Section 6039F (REG-108066-22)

- By : Parag Patel

…information available to different taxpayers. 4. Penalties for Non-Compliance: Promoting Fairness and Encouraging Voluntary Compliance Under Proposed Treas. Reg. § 1.6039F-4 The existing penalties for late or inaccurate filing of…

New Much-Needed Guidance for Non-Willful FBAR violations

- By : Parag Patel

…account. The memorandum also notes, however, that lesser penalties (e.g., only imposing the penalty in one year) or greater penalties (i.e., per account penalties) may be imposed when appropriate. Attachment…

New Court Case Limits the Reasonable cause exception to FBAR penalties

- By : Parag Patel

…a Defense to FBAR Violations? The matter came before a federal judge to determine whether those penalties are appropriate. Non-willful FBAR penalties may not be levied if the taxpayer properly…

The IRS’s First-Time Abatement (FTA) Penalty Waiver

- By : Parag Patel

…civil penalties. At the same time, the IRS abated nearly $9 billion in penalties. In other words, almost a third of penalties were abated. Few people know about the IRS’s…

New Court Ruling: FBAR penalties applied per form and not per account

- By : Parag Patel

…diminished penalties following a recent ruling from a federal trial court, where the taxpayer’s number of unreported accounts ranged from 41 to 51 for 4 different tax years. Facts: Alexandru…

US Supreme Court to Rule on FBAR Penalties Case

- By : Parag Patel

…violations, which can trigger penalties of up to 50% of foreign account assets for each year of non-reporting. In his petition to the Supreme Court, Bittner said non-willful penalties arise…

Penalty relief for International Information Forms 5471, 5472, and 8865

- By : Parag Patel

…that during the processing of the delinquent information return: “Penalties may be assessed in accordance with existing procedures…penalties may be assessed without considering the attached reasonable cause statement. It may…

Beware of U.S. tax consequences to a foreign trust with a U.S. beneficiary

- By : Parag Patel

…at the close of the taxable year. (iv) The failure to timely file a complete and correct Form 3520 or Form 3520-A may result in an additional penalty of $10,000…

New IRS IRM with Updated Streamlined Filing Compliance procedures

- By : Parag Patel

…resulted in unduly harsh penalties for inadvertent conduct. Under the revised procedures, in addition to avoiding criminal prosecution, qualifying taxpayers enjoy significantly reduced penalties, and in the case of certain…

Large Penalties: Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations

- By : Parag Patel

…Foreign Corporations, is used to comply with the law and regulations. Penalties for not timely filing the Form 5471 are severe. I.R.C. § 6038(b)(1) provides for a monetary penalty of…

Penalties for Form 5472 Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business

- By : Parag Patel

We would like to highlight a recent change in the IRS’ policy with respect assessing statutory late filing penalties related to certain international information forms. Of particular concern to international…

New Post-OVDP IRS Voluntary Disclosure Procedures Announced

- By : Parag Patel

…or accept payments. 3. PENALTIES: The civil penalties could be higher and more uncertain than what would have been assessed under the old Offshore Voluntary Disclosure Program. The civil fraud…

High Penalties for failure to file an FBAR: Not Really Enforced (yet)?

- By : Parag Patel

…greater. Willful violations may also be subject to criminal penalties. The statute of limitations on the assessment of FBAR penalties is 6 years from the due date of the FBAR….

New IRS practice unit: “Substantial compliance” doctrine, international information return penalties

- By : Parag Patel

The IRS Large Business and International (LB&I) division last week publicly released a “practice unit” that addresses what the term “substantially complete” means with reference to international information return penalties,…

Protective Filing of Information Returns

- By : Parag Patel

…file penalties. For example, if the IRS later determines that a foreign arrangement constitutes a trust, and Form 3520 and/or Form 3520-A should be filed, then failure to file the…

Unfiled FBAR Penalties Survive Death

- By : Parag Patel

Do FBAR penalties survive death? According to a new court ruling, the answer is clearly yes (unfortunately). In United States v. Gill, 2021 U.S. Dist. LEXIS 12203 (S.D. Tex. 6/30/21),…

Opt Out of OVDI Program Penalties to Get a Lower Penalty

- By : Parag Patel

Under the 2011 Offshore Voluntary Disclosure Initiative (OVDI) or 2012 Offshore Voluntary Disclosure Program (OVDP), the 2012 program gives no discretion to the IRS agents to reduce penalties. If a…

Helpful Non-willful FBAR penalty case decided by court

- By : Parag Patel

penalties, Mr. Moore was interviewed, received a notice proposing to assess the penalties, afforded an appeal process, and was issued notice of assessment. For 2005, although there was no meaningful…

2018 ABA COMMENTS ON THE OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : Parag Patel

penalties or criminal prosecution. However, taxpayers who choose to participate do so at considerable cost in terms of time and resources.   While we recognize the Service needs to do…

Foreign Account Penalties Are Unfair

- By : Parag Patel

Our office is advising dozens of clients (including many HSBC customers) regarding offshore accounts, all of whom may be subject to large unfair penalties. Finally it appears that someone in…

From Hong Kong With Love…

- By : Parag Patel

…issue is whether this transfer received is to be reported on a Form 3520? Form 3520 Background: Form 3520 is to be used by “U.S. Recipients of Gifts or Bequests…

Do You Have to Pay US Taxes on Foreign Inheritance?

- By : Parag Patel

…receiving a foreign inheritance: IRS Form 3520 The main form is IRS Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. This form…

Forms 5471, 5472, 3520 Partial Penalty Relief Still Available for 2019 and 2020 Returns

- By : Parag Patel

IRS Notice 2022-36 provided relief for certain taxpayers from certain failure to file penalties and certain international information return penalties with respect to tax returns for tax years 2019 and…

Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers

- By : Parag Patel

…and owing. For returns determined to be high risk, failure to file and failure to pay penalties may be imposed in accordance with U.S. federal tax laws and FBAR penalties