Can a District Court or Court of Claims Order the Disclosure of the Terms of a Settlement Agreement in an International Penalty Case?
By Anthony Diosdi Tax practitioners have long known it. Now, many with foreign financial assets are becoming painfully aware of it. The Internal Revenue Service or IRS automatically and systemically assess penalties against individuals and businesses that fail to timely disclose interests in offshore/foreign assets and holdings on Form 3520, Form 3520-A, Form 5471, Form 5472, or Form 8938. Penalties for failing to timely file these information returns can range from $10,000 to several million dollars.The Internal Revenue Code provides the IRS with the discretion to abate or remove an international penalty if a taxpayer acted with “reasonable cause.” Therefore, in theory at least, if an individual or business assessed an international penalty can show the failure to timely file a Form 3520, Form 3520-A, Form 5471, Form 5472, or…