Factors to Consider When Developing a Strategy to Contest a 3520 Penalty

Factors to Consider When Developing a Strategy to Contest a 3520 Penalty

Tax Law
By Anthony Diosdi 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 its reporting requirements. A well-known provision in Chapter 61 by tax attorneys is Section 6039F. Section 1905 of the 1996 Tax Act created new reporting requirements under Section 6039F for U.S. persons (United states person means United States citizens, United States residents, corporations, partnerships, or limited liability companies created or organized in the United States) 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 Internal Revenue Service (“IRS”) an opportunity…
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