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Are IRS Assessed Foreign Information Reporting Penalties Associated with Forms 3520, 5471, and 5472 Ripe for a Prepayment APA Suit?

Are IRS Assessed Foreign Information Reporting Penalties Associated with Forms 3520, 5471, and 5472 Ripe for a Prepayment APA Suit?

By Anthony Diosdi

Penalties for failing to timely file foreign information returns such as Form 3520, Form 5471, and Form 5472 with the Internal Revenue Service or IRS can be serious. Penalties for failing to timely file a foreign information return can range from a minimum of $10,000 to several million dollars. The authority to assess most international penalties can be found in Sections 6038 and 6039 of the Internal Revenue Code. Originally, these penalties were assessed manually against taxpayers during an audit. However, beginning January 1, 2009, the IRS began systematically assessing monetary penalties for failing to disclose interests in offshore/foreign assets and holdings on a foreign information return.

The IRS treats international penalties as summarily assessable, as they are not subject to deficiency procedures, wherein individuals receive a notice of deficiency alerting them of the potential assessment and explaining the taxpayer’s options for contesting or complying with the penalty assessment. The notice of deficiency also informs taxpayers of the last day to petition the United States Tax Court for pre-assessment and prepayment judicial review. Many penalties related to income tax filings are not summarily assessable (that is, they are generally subject to deficiency procedures). For example, deficiency procedures typically apply when the IRS determines noncompliance of a taxpayer resulted in an underpayment of some type of tax. Common penalties associated with the issuance of a notice of deficiency include an accuracy or negligence penalty under Section 6662 of the Internal Revenue Code. In other words, typically the IRS is required to issue a taxpayer a notice of deficiency and permit the taxpayer the ability to challenge an assessment before initiating collection actions.

Chapter 61 of the Internal Revenue Code contains countless reporting requirements regarding foreign information filing obligations. Many of the sections under Chapter 61 impose significant penalties for the failure to comply with the reporting requirements. The more well known reporting requirements and penalties are found in Chapter 61 and are as follows:

The Internal Revenue Code requires certain persons to provide the Internal Revenue Service or IRS with information regarding foreign corporations. This information is typically provided on Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. Substantively, Form 5471 backstops various international provisions of the Internal Revenue Code such as Sections 901/904 (Foreign Tax Credit), Section 951(a) (Subpart F and Section 956), Section 951A (GILTI), Section 965 (transition Tax), Section 163(j) (interest deduction limitation), and Section 482 (transfer pricing). International information returns that often are associated with Form 5471s include Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation), Form 5713 (International Boycott Report), Form 8621 (PFIC), Form 8990 (Limitation on Business Interest Expense), and Forms 1116/1118 (Foreign Tax Credit).

In the Form 5471, at a minimum, the reporting agent must provide the following information regarding a foreign corporation:

i) Stock ownership, including current year acquisition and dispositions,

ii) The names of U.S. shareholders,

iii) GAAP income statement and balance sheet,

iv) An accounting of foreign taxes accrued and paid,

v) Current and accumulated earnings and profits, including any actual dividend distributions during the corporation’s taxable year,

vi) An accounting of each U.S. shareholder’s pro rata share of GILTI and Subpart F income, and

vii) Disclosure of any transactions between the foreign corporation and its shareholders or related persons.

The Form 5471 is ordinarily attached to a U.S. person’s federal income tax return.
The penalty for failure to file, or for delinquent, incomplete or materially incorrect filing is a reduction of foreign tax credits by ten percent and a penalty of $10,000, as well as a reduction in the taxpayer’s foreign tax credit. See IRC Sections 6038(b) and (c). An additional $10,000 continuation penalty may be assessed for each 30 day period that noncompliance continues up to $60,000 per return, per year.

Similarly, Internal Revenue Code Section 6038A requires 25 percent foreign-owned domestic corporations and limited liability companies to report specified information as an attachment to a corporate tax return. This is done on Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. In filing a Form 5472, the filer must provide information regarding its foreign shareholders, certain other related parties, and the dollar amounts of transactions that it entered into during the taxable year with foreign related parties. A separate Form 5472 is filed for each foreign or domestic related party with which the reporting entity engaged in reportable transactions during the year. The practical importance of the Form 5472 is that the IRS often uses this form as a starting point for beginning transfer pricing audits.  Any reporting corporation or limited liability company that fails to file Form 5472 may be subject to a penalty of $25,000. If the failure continues for more than 90 days after notification by the IRS, there is an additional penalty of $25,000 for each 30 day period or fraction. There is no upper limit on this penalty.

Another well known provision in Chapter 61 is Section 6039F. Section 1905 of the 1996 Tax Act created new reporting requirements under Section 6039F for U.S. persons (other than certain exempt organizations) that receive large gifts (including bequests) from foreign persons. The information reporting provisions require U.S. donees to provide information concerning the receipt of large amounts that the donees treat as foreign gifts, giving the IRS an opportunity to review the characterization of these payments and determine whether they are properly treated as gifts. Donees are currently required to report certain information about such foreign gifts on Part IV of Form 3520.

Section 6039F(b) generally defines the term foreign gift as any amount received from a person other than a U.S. person that the recipient treats as a gift or bequest. However, a foreign gift does not include a qualified transfer (within the meaning of Section 2503(e)(2)) or any distribution from a foreign trust. A distribution from a foreign trust must be reported as a distribution under Section 6048(c)(discussed below) and not as a gift under Section 6039F.

Section 6039F(c) provides that if a U.S. person fails, without reasonable cause, to report a foreign gift as required by Section 6039F, then (i) the tax consequences of the receipt of the gift will be determined by the Secretary and ii) the U.S. person will be subject to a penalty equal to 5 percent of the amount for the gift for each month the failure to report the foreign gift continues, with the total penalty not to exceed 25 percent of such amount. Under Sections 6039F(a) and (b), reporting is required for aggregate foreign gifts in excess of $100,000 during a taxable year. Once the $100,000 threshold has been met, the U.S. donee is required to file a Form 3520 with the IRS.

The IRS believes it has a grant of authority to assess international penalties under Internal Revenue Code Section 6201(a). This provision of the Internal Revenue Code permits the IRS to assess tax as well as interest and penalties. In NFIB v. Sebelius, 567 U.S. 519 (2012), 546, the United States Supreme Court agreed that the plain language of Section 6201 places assessable penalties within the definition of a tax for purposes of granting the IRS the authority to assess those penalties. As a result, the IRS has taken the position that National Federation of Independent Business (NFIB) v. Sebelius authorized it to summarily assess and collect international penalties found in Chapter 61 of the Internal Revenue Code without the issuance of a notice of deficiency.

Originally, penalties associated with Form 5471, Form 5472, and Form 3520 (hereinafter “international penalties”) were assessed manually on individuals and entities whose missing filings were discovered during an audit. The IRS is still assessing international penalties during audits. Several years ago the IRS began a systemic assessment of international penalties associated with the late filing of these returns. The systemic assessment of international penalties is controversial. This is because many taxpayers are unaware of their international reporting obligations until they learn of their filing obligations after the due date of the filing obligation has already passed. Many of these same taxpayers often try to comply with their international filing obligations by filing an international informational return (i.e. Form 5471, Form 5472, and Form 3520) late. The IRS typically rewards these same taxpayers “trying to do the right thing” by automatically assessing international penalties or foreign information reporting penalties against them. These penalties can range from a minimum of $10,000 to several million dollars.

Although taxpayers assessed an international penalty cannot challenge the penalty through the deficiency procedures, the IRS claims to allow individuals assessed foreign reporting penalty the opportunity to seek a post-assessment, prepayment review with the IRS Independent Office of Appeals. Although the IRS claims that the Independent Office of Appeals will provide fair hearings, not many have confidence the Independent Office of Appeals will provide a fair procedure for removal or abatements of foreign reporting penalties. This has resulted in many to demand change in the way the IRS assesses foreign information reporting penalties. Even the National Taxpayer Advocate has urged Congress to make at least some penalties under Section 6038 subject to deficiency procedures. See Taxpayer Advocate Urges Change to Info Reporting Penalty Procedures, Tax Notes Int’l, Jan 17, 2022, pp. 382-83.

Judicial Avenues to Contest Foreign Reporting Penalties

Since current law does not permit taxpayers to utilize the deficiency procedures to contest an international penalty, there are three primary avenues for judicial review of international penalties. A taxpayer assessed an international penalty can pay the penalty in full, file an administrative refund claim with the IRS, and then sue the Government for a refund of the penalty in either a United States district court with proper venue or the United States Court of Federal Claims. A taxpayer may also attempt to contest an international penalty through the procedures discussed in Internal Revenue Code Sections 6330 or 6320.

Sections 6330 and 6320 provide administrative procedural rights for taxpayers who receive notices of proposed levy or notices of federal tax lien filings. These safeguards are generally referred to as Collection Due Process (“CDP”) hearings. If a taxpayer timely files for a CDP hearing, the IRS Independent Office of Appeals is tasked with determining whether the IRS complied with “any applicable law or administrative procedure” with respect to the levy or lien. If a taxpayer desires to request a CDP hearing in response to the issuance of a final notice, no later than 30 days after the date of the final notice, the taxpayer must submit to the IRS a Form 12153, Request for a CDP or Equivalent Hearing. Once a taxpayer has requested a CDP hearing, whether inter alia, with respect to- a Notice of Federal Tax Lien Filing and Your Right to a Hearing under Internal Revenue Code Section 6320, or a Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing under Internal Revenue Code Section 6330, Internal Revenue Code Section 6330(b)(1) provides the taxpayer with a hearing before an independent Appeals Officer.

At the conclusion of the hearing, the Appeals Officer should issue a Notice of Determination. If the Notice of Determination does not resolve the matter, the taxpayer has the right to seek judicial review of the determination by filing a petition with the United States Tax Court within 30 days of the day after the date on the determination letter. See IRC Section 6330(d)(1); Treas. Reg. Section 301.6330-1(f)(1). Once a taxpayer has timely requested a CDP, enforced collection (such as levy actions) should stop until the taxpayer has been issued a Notice of Determination and has had an opportunity to petition the United States Tax Court and request a redetermination. See IRC Section 6330(e)(1) and (2).

The problem faced by many taxpayers that have been assessed foreign reporting penalties is that despite the fact CDP hearings are being timely requested, the IRS is refusing to grant them. This has been incredibly frustrating for both taxpayers and tax professionals. In some cases, the IRS has continued to threaten enforced collection actions despite the fact that a CDP hearing has been timely requested. In other cases, the IRS has levied Social Security Benefits and refunds of taxpayers even though a CDP hearing has been timely requested. This brings us to the third and final avenue for judicial review, the Administrative Procedure Act or APA. The remainder of this article will discuss the hurdles involved with bringing an APA suit to review an international penalty.

An Overview of the Administrative Procedure Act and the Importance Establishing a Waiver of Sovereign Immunity

Federal agencies such as the IRS do not exercise their power in a vacuum. They are part of our political system and, as such, are subject to various forms and degrees of control by the judicial branch of our government. With that said, in government litigation, sovereign immunity is potentially a serious matter. Potentially, it is an absolute barrier to suits against the IRS. While it is an entrenched doctrine, sovereign immunity is not the barrier to judicial review it portends. Congress, through the Administrative Procedure Act or APA, has expressly waived sovereign immunity. The judicial portions of the APA provide “An action in court of the United States seeking relief other than money damages…shall not be dismissed nor relief therein be denied on the grounds that it is against the United States…” See 5 U.S.C.A. Section 702. It includes actions to set aside agency orders or rules or, more generally, actions for declaratory and injunctive relief respecting some agency action or inaction.

By its terms, this waiver stops short of “money damages.” By construction of the Supreme Court, however, this exclusion for money damages has itself been narrowed, according to the term “damages.” Damages arising at law (for injuries to person, property, or reputation, and so forth) have been contrasted to equitable remedies requiring the transfer of money. The APA waiver for money damages includes the former (legal damages) but not the latter (equitable remedies). The fact that a “judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the action as money damages.” See Massachusetts v. Bowen, 487 U.S. 879, 893, 108 S.Ct. 2722, 2731, 101 L.Ed.2d (1988).

A person adversely affected or aggrieved by a federal agency action within the meaning of a relevant statute, is entitled to judicial review. The only exceptions with the rules governing the APA is where a statute precludes judicial review or the “agency action is committed to agency discretion of law.” Although the APA creates more than one standard of review, all agency actions are subject to review to determine if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” In other words, an abuse of discretion. Similarly, all agency action must meet applicable statutory, procedural, and constitutional requirements. In certain circumstances, a court reviews an agency action for “substantial evidence.” (Review under the substantial-evidence test is authorized only when the agency action is [rulemaking] or the agency is based on a public adjudicatory hearing.”). A court may conduct a de novo trial of facts underlying an agency action, but that standard of review only applies where the agency’s adjudicative fact finding procedures are inadequate. See U.S.C. Section 706(2)(F).

On its face, it appears that Congress has provided a broad avenue to the federal courts to persons aggrieved by agency action the APA. Does the APA give the right to a taxpayer assessed a foreign information reporting penalty the ability to ask a federal court for declaratory or injunctive relief? The short answer is it depends on the facts of his or her case. Anyone considering requesting declaratory or injunctive relief in connection with an international penalty must understand that this route is restricted, by limitation imposed by Congress with respect to the IRS. For instance, let’s say the IRS assessed a foreign information reporting penalty against Tom in the amount of $10 million and did not permit him with the opportunity to administratively contest the penalty. Although the IRS’s action is probably “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law,” under these facts alone, Tom cannot maintain an APA suit against the IRS in a prepayment context. However, Tom can pay the foreign information reporting penalty in full and sue the IRS in a refund action.

To ask a federal court to order declaratory or injunctive relief, Tom will not only need to establish that the IRS’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” or an abuse of discretion, Tom will also need to establish that as a result of the IRS’s actions, he will suffer irreparable injury for which he has no adequate remedy at law. See Enochs v. Williams Packing and Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962); Miller v. Standard Nut Margarine Company of Florida, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 517 (1932); Midwest Haulers, Inc. v. Brady, 128 F.2d 496 (6th Cir. 1942). In addition, Tom will need to establish that he lacks an adequate remedy in another proceeding. Thus if Tom has an adequate alternative remedy to contest the international penalty assessed against him such as suing the IRS in a refund suit (the fact that Tom may not be able to pay the $10 million penalty in full is not relevant for APA purposes), his APA suit will likely be dismissed by the court. See Maze v. IRS, 862 F.3d 1087 (D.D.C. 2017); Florida Bankers Ass’n, 799 F.3d at 1065, 1067 (2015).

Let’s assume now that Tom timely filed a CDP with the IRS challenging the international penalty assessment. Let’s also assume that the IRS decided to proceed with enforced collection actions against Tom and levied his wages despite the fact that he timely requested a CDP. The IRS wage levy is a violation of Section 6330(e)(1) and (2) and Tom suffered irreparable harm as a result of the wage levy. Under these facts, Tom could potentially ask a federal court to order declaratory or injunctive relief in an APA suit against the IRS. See Hart v. United States, 291 F.Supp.2d 635, 645 (N.D.Ohio 2003). However, the exception is not triggered by the mere issuance of a Notice of Intent to Levy. See Springer v. IRS, Fed.Appx. 763 (2007).

The final hurdle Tom or any other litigant seeking APA injunctive or declaratory relief in connection with an international penalty assessed by the IRS is the Anti-Injunction Act or AIA of Section 7421(a) and Declaratory Judgment Act or DJA of Section 2201 which provides limitations on judicial review of the APA.

The Applicability of the Anti-Injunction Act and Declaratory Judgment Act to an APA Case Involving a Foreign Information Reporting Penalty

The AIA provides that any disputes about taxes or tax related penalties must always be channeled into the United States Tax Court deficiency proceedings or through refund litigation. See Maze v. Interal Rev. Serv., 206 F.Supp. 3d 1, 5 (D.D.C. 2016), Aff’d 862 F.3d 1087 (D.C. Cir. 2017). “The manifest purpose of [the AIA] is to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund. In this manner the United States is assured of prompt collection of its lawful revenue.” See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7, 82 S.Ct. 1125, & L.Ed.2d (1962). The AIA “protects the Government’s ability to collect a consistent stream of revenue, by barring litigation to enjoin or otherwise obstruct the collection of taxes.” Thus, the AIA’s clear purpose is to limit lawsuits that have been brought to restrain or otherwise interfere with the federal government’s “assessment and collection” of taxes.

The DJA, by contrast, is not specifically aimed at curbing tax-related litigation. Generally speaking, the DJA merely provides a mechanism by which federal courts “may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” See 28 U.S.C. Section 2201. There is, however, one major limitation on the reach of the DJA: it applies to “case(s) of actual controversy within [a federal court’s] jurisdiction, except with respect to federal taxes other than actions brought under Section 7428 of the Internal Revenue Code. This statutory exception commonly known as the DJA “tax exception,” is directly related to the AIA. When first adopted in 1934, the DJA contained no tax exception. A year later, after plaintiffs in several lawsuits sought to use the DJA as an end-run around the AIA, Congress amended the statute by adding the tax exception. The DJA tax exception serves a critical but limited purpose. It strips courts of jurisdiction to circumvent the AIA by providing declaratory relief in cases restraining the assessment or collection of any tax.” See Cohen v. United States, 650 F.3d 717, 729 (D.C.Cir.2011). The history behind the tax exception to the DJA and its relationship to the AIA has led most federal courts to conclude that the scope of the DJA’s tax exception is “conterminous” or “coextensive” with the AIA’s prohibition. This means that the DJA’s exemption for suits “with respect to Federal taxes” is synonymous with the AIA’s bar against suits that seek to restrain the “assessment and collection” of federal taxes. Thus, the DJA is not available as a means to seek declaratory relief in suits that the AIA otherwise bars.

On its face, the AIA precludes lawsuits that have been brought “for the purpose of restraining the assessment or collection of any tax, and the DJA’s tax exception prevents a declaratory judgment action “with respect to Federal taxes.” As has been stated above, these two categories of cases are effectively one and the same; therefore, the question that must be answered is whether a foreign information reporting penalty is a tax for purposes of the AIA. If a foreign information penalty is classified as a tax for purposes of an AIA, a federal court will not likely have jurisdiction to order injunctive or declaratory relief in many APA cases. On the other hand, if a foreign information penalty is not classified as a tax for purposes of the AIA, the AIA will not be a barrier in an APA case involving injunctive or declaratory relief. Unfortunately, there is no case law directly on point addressing this issue.

On January 21, 2019, Tax Notes published an article by Robert Horwitz arguing that penalties in Chapter 61 are not a tax and assessed and collected in the same way as a tax. See Can the IRS Assess or Collect Foreign Information Reporting Penalties? Tax Notes, January 21, 2019, p. 201. Consequently, an action for declaratory or injunctive relief concerning the assessment of foreign reporting penalties in Chapter 61 is not barred. For the reasons discussed in the next subsection of this article, I have come to the same conclusion. 

Based on the Supreme Court’s Reasoning in NFIB, a Foreign Information Reporting Penalty Neither the AIA or DJA Bars a Lawsuit for Injunctive Declaratory Relief Concerning a Taxpayer’s Ability to Maintain an APA Suit

As discussed above, most foreign information reporting penalties (including those associated with the late filing of IRS Forms 3520, 5471, and 5472) are found in Chapter 61 of the Internal Revenue Code. Robert Horwitz cogently concluded that based on Supreme Court’s reasoning in NFIB, penalties located in Chapter 61 of the Internal Revenue Code are not deemed a tax and therefore neither the DJI nor DJA bars a lawsuit for injunctive or declaratory relief in APA litigation.

NFIB involved the legality of the Affordable Care Act. The Supreme Court ultimately upheld the Affordable Care Act. In order to reach its decision, the Supreme Court had to determine if the AIA applied to penalties associated with individual mandates. The Supreme Court determined that subchapters 68A and 68B of the Internal Revenue Code associated with health care mandates are not a tax for purposes the madandates contained in the Affordable Care Act. Like the penalties associated with the Affordable Care Act, the foreign information reporting many penalties located in Chapter 61 are not classified as a tax. There is not even a provision in Chapter 61 which would allow foreign information reporting penalties to be assessed and collected as a tax. Under this reasoning, a foreign information reporting penalty contained in Section 6038 (penalties associated with the late filing of IRS Forms 3520, 5471, 5472) cannot be deemed a tax and subject to limitations of the AIA.

To better understand this reasoning, it is necessary to take a look at the Government’s legal brief and an amicus brief that was filed by a group of legal scholars.

In its brief, the government argued as follows:

“Because only certain “penalties” are deemed “taxes” for purposes of the AIA, the federal government has argued that pre-enforcement challenges to the minimum coverage provision are not barred…That analysis is inapposite here, given that Congress expressly referred to the “assessable payment” in the employer responsibility provision as a “tax.” Accordingly, the federal government believes that the Fourth Circuit erred when it concluded that the AIA bars pre-enforcement challenges to the minimum coverage provision, but correctly determined that it bars pre-enforcement challenges to the employer responsibility.”

The amicus brief provided as follows:

“We think the Government has the better reading. As it observes, “Assessment” and “Collection” are chapters of the Internal Revenue Code providing the Secretary authority to assess and collect taxes, and generally specifically the means by which he shall do so. See sections 6201 (assessment authority); section 6301 (collection authority). Section 5000A(g)(1)’s command that the penalty be “assessed and collected in the same manner” as taxes is best read as referring to those chapters and giving the Secretary the same authority and guidance with respect to the penalty. That interpretation is consistent with the remainder of section 5000A9G0, which instructs the Secretary on the tools he may use to collect the penalty. See section 5000A(g)(2)(A)(barring criminal prosecutions); section 5000A(g)(2)(B)(prohibiting the Secretary from using notices of lien and levies). The AIA, by contrast, says nothing about the procedures to be used in assessing and collecting taxes.”

In their amicus brief, the legal scholars argued that all taxes should include all penalties found under the Internal Revenue Code should be treated as a tax for purposes of the AIA and Internal Revenue Code Section 6201(a). This includes additions to tax such as penalties for failure to timely pay a tax, penalties for failing to timely file a tax return, and assessable penalties. 

The Supreme Court held that this argument has force only if Section 6201(a) is read in isolation. The Supreme Court went on to say that the Internal Revenue Code contains many provisions treating taxes and assessable penalties as distinct terms. See, e.g., sections 860(h)(1), 6324A(a), 6601(e)(1)-(2), 6602, 7122(b). There would be no need for Section 6671(a) to be deemed “tax” to refer to certain assessable penalties if the Code already included all such penalties in the term “tax.” Indeed, amicus’s earlier observation that the Code requires assessable penalties to be assessed and collected “in the same manner as taxes” makes little sense if assessable penalties are themselves taxes. In light of the Code’s consistent distinction between the terms “tax” and “assessable penalty,” we must accept the Government’s interpretation: section 6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes. See NFIB, 567 U.S. 545-546.

The reasoning of the Supreme Court means that penalties located under Chapter 61 of the Internal Revenue Code are not deemed a tax. It also means that neither the AIA nor DJA bars a lawsuit for injunctive or declaratory relief concerning penalties found under Chapter 61 of the Internal Code. Since these reporting penalties associated with Forms 3520, 5471, 5472 are not assessed and collected the same way as a tax, an action for declaratory or injunctive relief concerning these penalties are not barred by the AIA.


The APA is a ripe area for litigation challenging the IRS’s assessment and collection of foreign information reporting penalties. Whether and when the federal courts will review the IRS’s actions in regards to foreign information reporting penalties are reasonably complicated matters. Questions about judicial review of foreign information reporting penalties under the APA will probably come down to how federal courts interpret sovereign immunity and the AIA in the particular case.

We have substantial experience advising clients ranging from small entrepreneurs to major multinational corporations in foreign tax planning and compliance. We have also  provided assistance to many accounting and law firms (both large and small) in all areas of international taxation.

Anthony Diosdi is one of several tax attorneys and international tax attorneys at Diosdi Ching & Liu, LLP. Anthony focuses his practice on domestic and international tax planning for multinational companies, closely held businesses, and individuals. Anthony has written numerous articles on international tax planning and frequently provides continuing educational programs to other tax professionals.

He has assisted companies with a number of international tax issues, including Subpart F, GILTI, and FDII planning, foreign tax credit planning, and tax-efficient cash repatriation strategies. Anthony also regularly advises foreign individuals on tax efficient mechanisms for doing business in the United States, investing in U.S. real estate, and pre-immigration planning. Anthony is a member of the California and Florida bars. He can be reached at 415-318-3990 or adiosdi@sftaxcounsel.com.

This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.