Requesting Penalty Abatements for Failure to File Forms 5471, 5472, FATCA and FBAR
This CLE/CPE webinar will provide tax counsel with a detailed discussion of best practices for requesting abatements of IRS penalties due to failure to properly file required international information forms such as the FBAR, Form 8938, and Forms 5471 and 5472. The panel will discuss the current trends in IRS abatement and will provide guidance on drafting abatement requests.
Description
The IRS has been increasing its attention and resources to international and transnational tax compliance reporting over the past several years. Tax reporting of international accounts and activities can be complex, and failure to file foreign tax informational forms typically trigger more severe penalties than failure to file most required domestic tax informational forms.
The Internal Revenue Code sets penalties for failure to file Forms 5471 and 5472 at $10,000 per unfiled return. Additionally, Code Section 6038(c) provides for a reduction of 10% or more of foreign taxes available for credit under Sections 901, 902 and 960. Likewise, the penalties for failure to file the FBAR (FinCEN Form 114) range from $10,000 for non-willful failure to the greater of $100,000 plus 50% of the account balance at the time of the violation for willful noncompliance.
The IRS employs strict standards for determining whether a taxpayer qualifies for an abatement of penalties for failure to file required foreign tax returns. In December 2013, TIGTA issued a report indicating that IRS controls over penalties were deficient, leading to incorrect abatement in a large percentage of tested cases. As a result, theIRS has increased scrutiny over foreign penalty abatement requests.
With the IRS continually increasing penalty assessments and decreasing the number of abatements, tax counsel needs to be fully knowledgeable of the requirements and processes for requesting abatements of penalties for failure to file required foreign tax information.
Listen as our experienced panel provides best practices for documenting and filing requests for abatement of foreign tax penalties.
Outline
- OVDP and penalty avoidance programs
- What happens when penalty avoidance fails?
- Penalty structures
- Reasonable cause abatement standards
- Best practices in drafting penalty abatement requests
- IRS penalty abatement request process
Benefits
The panel will discuss these and other critical questions:
- What foreign reporting forms are subject to foreign tax reporting penalties?
- What are the penalty structures for non-willful, willful and willful failure when other violations are in place?
- What are the standards for “reasonable cause” abatement?
- What is the IRS penalty abatement decision tree model, and how does it apply to requests to abate foreign tax penalties?
Learning Objectives
After completing this course, you will be able to identify the penalty structures for failure to accurately and timely file required foreign tax information forms. You will know the IRS standards for reasonable cause abatement requests, and you will understand the IRS decision-making process as found in the Internal Revenue Manual for evaluating abatements. You will know how to draft and document a penalty abatement request to conform with IRS requirements.
Faculty
Dennis N. Brager, Esq.
Brager Tax Law Group, Los Angeles
Dennis Brager is a nationally known tax litigation attorney, representing clients in criminal and civil tax litigation and tax controversy matters. Before founding the Brager Tax Law Group, a Los Angeles-based tax litigation and tax controversy law firm, he was a senior trial attorney for the Internal Revenue Service’s Office of Chief Counsel. Since 2008 he has represented several hundred clients with offshore accounts. He also represents clients on a variety of issues, including criminal and civil tax fraud, tax audit and appeals, payroll and sales tax problems, tax preparer penalties, innocent spouse defenses, offers in compromise, installment payment agreements, Office of Professional Responsibility (“OPR”) defenses and more.
Joel N. Crouch, Partner
Meadows Collier Reed Cousins Crouch & Ungerman, Dallas
Mr. Crouch specializes in civil and criminal tax controversies involving sophisticated and complex legal and tax issues, both domestic and international. He has extensive experience in resolving tax matters at all stages of a tax dispute including IRS examinations, administrative appeals, and litigation in the U.S. Tax Court, the U.S. Court of Federal Claims and U.S. District Courts, and before the United States Supreme Court. He is a frequent speaker on both substantive and procedural tax issues for both legal and accounting professionals.
Arthur V. Pearson, Founding Shareholder
Murphy Pearson Bradley & Feeney, San Francisco
Mr. Pearson practices accounting and tax malpractice defense, as well as tax and business transactions. He forged a proven methodology of dealing directly with the tax authorities to correct late elections, reduce or eliminate penalties, or otherwise mitigate tax situations to achieve positive results. He is a published author and lecturer on lecturer on tax issues and accounting malpractice risk management.