The IRS’s historical abuses led Congress to create specific taxpayer rights, including rights stemming from collection due process (“CDP”) hearings. These administrative hearings are intended to pause IRS collection actions while the IRS Office of Appeals considers whether the collection is both lawful and warranted. One might assume these rights extend to any liability assessed…
Category: Foreign Penalties
Foreign Penalties
Penalties assessed for failing to comply with foreign asset reporting requirements or other international tax obligations. Give us a call to see how we can help, (713) 909-4906.
Court Says IRS Can Assess Form 5471 Penalties
Our federal tax system is code-based. This means that most of what the law is can be found in statutes. The premise is that one can read the statutes and get a general idea of what the law is. This is why when it comes to tax law, each word matters. Adding or removing a…
The Evolution of Foreign Account Tax Reporting
The IRS and Treasury face a number of challenges in administering our tax and financial systems. This includes challenges presented by foreign transactions by U.S. citizens and residents. In recent years, high-profile cases involving Americans using offshore accounts to evade taxes have prompted the U.S. government to crack down on tax evasion and make it…
Foreign Trust Beneficiary Liable for a Double Tax Penalty?
Can the sole owner of a foreign trust who is also its sole beneficiary be penalized twice for not filing a single Form 3520? Can the IRS choose the higher penalty for the beneficiary in this situation? In Wilson v. United States, No. 19-cv-5037 (BMC) (E.D.N.Y. 2019), the IRS argued that it could impose pick…
IRS Penalties for Late-Filed Forms 5471
The Dewees v. United States, 16-cv-01579 (D.D.C. 2017) case is a good reminder that late-filed Forms 5471 should include reasonable cause statements. These statements can be submitted under the IRS’s Delinquent International Information Return Submission Procedures to avoid penalties being assessed. The Facts and Circumstances in Dewees Dewees is a U.S. citizen who lived in…
Reckless Conduct Sufficient for FBAR Civil Tax Penalty
It is not clear as to what level of conduct justifies the imposition of the $100,000+ foreign bank account reporting (“FBAR”) civil tax penalty. In Bedrosian v. United States, No. 15-5853 (E.D. Pa. 2017), the court considered whether reckless conduct is sufficient given the facts presented in the case. The FBAR Civil Tax Penalty The…
The IRS’s Streamlined Procedures for Foreign Accounts
Given its limited resources and ability to detect foreign assets, accounts and income, the IRS has offered various voluntary programs to entice taxpayers to come clean and report this information. The IRS’s OVDP program and the more recent streamlined procedures are two examples. The Maze v. Internal Revenue Service, Nos. 15-1806 (D.D.C. 2016), highlights several…
Online Account Trigger FBAR Filing, Not Poker Websites
In Hom v. United States, No. 14-16214 (9th Cir. 2016), the court addressed whether an online payment account and poker websites triggered FBAR filing requirements. The stakes are high with FBAR penalties, so those with foreign accounts should take heed. FBAR Filing Requirements Taxpayers with an interest in or authority over certain foreign accounts are…