FBAR and the IRS Penalty Appeal Process
Website design By BotEap.comYou must submit a report to the IRS if you have foreign financial accounts with an aggregate value greater than $ 10,000 at any time during the calendar year. The deadline for filing FinCEN Form 114, Foreign Bank and Financial Account Report (FBAR) is June 30 of each year. Failure to file can incur huge civil or criminal penalties on those accounts. Both the IRS and the Financial Crimes Enforcement Network (FinCEN) have authority over the FBAR program, but the IRS now has the responsibility to conduct the evaluation and enforcement of the FBAR penalties for noncompliance. The important thing is that you have the legal right to appeal IRS decisions if you believe the fine has been arbitrarily assessed. In this article, we will explore some key points about the FBAR appeal process.
Website design By BotEap.comIRS Appeals Office
Website design By BotEap.comFirst, no payment of FBAR fines is required until the appeal process is complete. Also, keep in mind that the statute of limitations is different for FBAR assessments and FBAR collections. The evaluation of an FBAR ticket is done by a local tax examiner, but FBAR sanction appeals are handled at the IRS Appeals Office in a centralized location where there will be an FBAR Coordinator who will ensure that the resolutions are consistent. in all the country. Since it is a coordinated topic, a referral to the IRS International Operations department is required before the first conference can take place.
Website design By BotEap.comPenalty evaluation: two types
Website design By BotEap.comPrior assessment of appeals
Website design By BotEap.comIf the taxpayer disagrees with the assessment of the FBAR penalty, then they have to appeal within 45 days. This will be considered a pre-evaluation appeal. Pre-assessed FBAR fines are eligible for Fast Track Settlement (FTS) and Fast Track Mediation (FTM) as well, but only if Letter 3709 has not been issued to the taxpayer. So remember, there is no better time than now to appeal.
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Website design By BotEap.comIf there are less than 180 days left in the statute of limitations for evaluation, the IRS can evaluate the FBAR penalties at the time the appeals department receives your case. Does this mean that you can no longer appeal if the statute’s expiration date approaches? No way; you can. In a scenario like this, you will be granted post-assessment appeal rights. Post-assessment FBAR cases will be handled in an expedited manner and must be processed within 120 days of assignment. Fast Track Settlement (FTS) or Post Appeals Mediation (PAM) rights are not available in Post Assessment Appeals cases.
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Website design By BotEap.comYou can file a complaint in District Court or Federal Claims Court to challenge the fine imposed. Once you have gone through a process known as “exhausting your administrative remedies,” you are eligible to file a lawsuit in court, at odds with the record on which the IRS claim is based. Involving a tax attorney familiar with the nuances of FBAR procedures (such as “intentional” and “unintentional” penalties) could be beneficial at this point and could help you win your appeal of FBAR penalties.