Our client, an individual taxpayer, was hit with a seven-figure penalty by the Internal Revenue Service for failure to disclose a foreign bank account. The client had disclosed the foreign bank account through both the FinCEN disclosures and the relevant IRS form. The taxpayer was unable to find someone to explain the issue to at the IRS in order to resolve the matter. The accountant-preparer brought the case to us.
First, we established a Power of Attorney allowing us to communicate with the IRS on the client’s behalf. We filed a Freedom of information Act Request for the taxpayer’s file and the specific filing in question. We submitted an offer in compromise based on doubt as to liability and offered the IRS $1.
Through negotiation and utilizing the proof from the Freedom of information Act Request, we were able to get the IRS to waive the $1 and close the case. Our client walked away from a penalty of over one million dollars.