Just an update - I phoned the IRS today and spoke with a very reasonable agent who said that the letters may be related to information that was sent in by me but not yet processed. It was heartening speaking with someone who provided good solid assistance, and to help make sense of the letters. She seemed to suggest that there will be no penalties, which is consistent with what I've seen on this board as well as prior IRS info. So I am much calmer now.
Perhaps the common thread is that these 3520's are being resolved, just more slowly than first thought. I hope these go well for all posters here!
Help - IRS letter indicating penalty for late 3520
Moderator: Mark T Serbinski CA CPA
Primo, CdnAmerican, calvin_g,
That's wonderful news...wish I could say the same with my situation. =(
I've sent them a response back in June in reference to a notice of penalty for my 2010 tax yr and received 2 letters in July. The first letter stated that they have "determined that no action was required on my account." A second letter stating that they need to do more research and will send another response in 45 days. Confused as it is, I phoned IRS and was told just to wait for another reply from them.
Today, I received another Notice of Penalty - 2nd request for payment with interest added on. I phoned them again and was told to phone the Business Unit [day shift]. I've done this before and got no where. I don't know whether this 2nd request for payment has any relation to their 2nd letter informing me that they will need more time to do further research. I'm really confused.
That's wonderful news...wish I could say the same with my situation. =(
I've sent them a response back in June in reference to a notice of penalty for my 2010 tax yr and received 2 letters in July. The first letter stated that they have "determined that no action was required on my account." A second letter stating that they need to do more research and will send another response in 45 days. Confused as it is, I phoned IRS and was told just to wait for another reply from them.
Today, I received another Notice of Penalty - 2nd request for payment with interest added on. I phoned them again and was told to phone the Business Unit [day shift]. I've done this before and got no where. I don't know whether this 2nd request for payment has any relation to their 2nd letter informing me that they will need more time to do further research. I'm really confused.
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CdnAmerican
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- Joined: Tue Aug 30, 2011 12:15 am
Hi zad - I had some more news on my situation but wanted to wait until I had a final resolution before posting again. Again, I received 4 (now 5) letters indicating that there would be a $10k penalty assessed. I called the IRS and spoke with a helpful person who said she'd investigate it; the next day I spoke with her again and she said these penalties were abated, not to worry. She said letters indicating this would be forthcoming. Then this week, I got a penalty letter (actually 3) which also had a bill attached. I phoned and reached a different agent; she looked into this (pretty throroughly, I think, as I was on hold for awhile) and likewise said that there was no penalty. It sounded like the computer system sends letters that may or may not be accurate.
So, I hope to still get the 'no penalty' letter as proof that there is, in fact, no penalty, and then I will respond to these bills in writing. It is unfortunate that you find this out on a weekend when you can't investigate it. Hopefully you will call in on Monday and get the same kind of result - that, in fact, the penalty letter is wrong. I am also a bit concerned, but I have good evidence that there will indeed by no penalty. It's just scary to get a nasty penalty letter.
It seems that when a human looks into the situation, I get a reasonable response. The computer-generated letters seem to not be, however. The good news is that the humans should win out (eventually, anyway).
Good luck!
So, I hope to still get the 'no penalty' letter as proof that there is, in fact, no penalty, and then I will respond to these bills in writing. It is unfortunate that you find this out on a weekend when you can't investigate it. Hopefully you will call in on Monday and get the same kind of result - that, in fact, the penalty letter is wrong. I am also a bit concerned, but I have good evidence that there will indeed by no penalty. It's just scary to get a nasty penalty letter.
It seems that when a human looks into the situation, I get a reasonable response. The computer-generated letters seem to not be, however. The good news is that the humans should win out (eventually, anyway).
Good luck!
Not a professional opinion.
Thanks CdnAmerican.
I wonder if I've been calling the right phone number as I never get to talk to any knowledgeable, helpful agent. I always somehow get someone who will tell me to call during the day or that I need to speak with someone in the business unit or some other reason. Do you have a different number that I can call?
Yesterday, I was given a number to call but when I called the number, it was for the Offshore Voluntary Disclosure Dept. which my case does not fall under. I have been filing my taxes since I have been in Canada. My 3520/3520As were filed late as I had no knowledge and went with the IRS agent's advice that all I needed was to include the income in my tax return and FBAR. And to find out a year later that I was suppose to file forms 3520/3520A in relation to my TFSA. =(
I wonder if I've been calling the right phone number as I never get to talk to any knowledgeable, helpful agent. I always somehow get someone who will tell me to call during the day or that I need to speak with someone in the business unit or some other reason. Do you have a different number that I can call?
Yesterday, I was given a number to call but when I called the number, it was for the Offshore Voluntary Disclosure Dept. which my case does not fall under. I have been filing my taxes since I have been in Canada. My 3520/3520As were filed late as I had no knowledge and went with the IRS agent's advice that all I needed was to include the income in my tax return and FBAR. And to find out a year later that I was suppose to file forms 3520/3520A in relation to my TFSA. =(
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
Hi zad - Try the regular number for the INternational office which is probably on your letter. Call during business hours in the Eastern time zone - my limited experience has been that I get better results then. (There is sometimes a delay, but most of the time they answer pretty quickly.) Then press 2, and 2 again. The second 2 is for business return questions, which strangely enough is where 3520 falls. (Be prepared to take down the agent's name and ID #, which they will provide when answering the phone.) Then provide the TIN, and also mention the leter you previously received. Depending on who you get, it may take awhile, but I bet that will do the trick. (Hopefully. But there is some luck of the draw here, I suspect.) Since you had gotten a letter already that put you in the clear, my suspicion is that you are still in the clear. But I would also ask them how best to respond; my guess would be that sending back the 'no penalty' letter along with the penalty letter and a cover letter describing the situation (including again your explanation, which you've already provided) will probably suffice. I wish that 'probably' was a 'definitely,' of course. Our situations are similar; I continue to believe that this will work out in the end, but just don't know exactly how much future hassle will be necessary for it to work out.
Good luck on Monday!
Good luck on Monday!
Not a professional opinion.
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
5am is not too bad. First time I tried calling them back in June, I woke up at 3:30am, as I was told that they start at 6am EST, just to get someone who's only suggestion was to take my name and number and someone will call me back and that could take as long as 30 days!! :shock:
Thanks CdnAmerican! crossing my fingers...
Thanks CdnAmerican! crossing my fingers...
Update:
I made the call this morning at 8AM EST, as CdnAmerican suggested [Thank you!]. I spoke with a helpful agent...gave him a brief history of my situation.
The agent asked for my EIN or SSN and looked up my file. He confirmed that no penalty was noted for my 2009 tax year. He didn't quite understand why I am being charged a penalty for my 2010 if both tax years were submitted together.
He suggested that I respond to the "2nd request for payment" and fax it to his attention. I did mention to him that I already did respond to the first notice and had received a correspondence from their agency requiring further research into my account. To which he then told me that they do have 2 separate files for the 3520s - one for the EIN and the other with the SSN. He then said that he will put a hold on my account so I won't be receiving further requests for payment until I receive a final response from their "Reviewing" dept. or did he say "research"(?)... Crossing my fingers and hoping that this will resolve sooner than later!
I made the call this morning at 8AM EST, as CdnAmerican suggested [Thank you!]. I spoke with a helpful agent...gave him a brief history of my situation.
The agent asked for my EIN or SSN and looked up my file. He confirmed that no penalty was noted for my 2009 tax year. He didn't quite understand why I am being charged a penalty for my 2010 if both tax years were submitted together.
He suggested that I respond to the "2nd request for payment" and fax it to his attention. I did mention to him that I already did respond to the first notice and had received a correspondence from their agency requiring further research into my account. To which he then told me that they do have 2 separate files for the 3520s - one for the EIN and the other with the SSN. He then said that he will put a hold on my account so I won't be receiving further requests for payment until I receive a final response from their "Reviewing" dept. or did he say "research"(?)... Crossing my fingers and hoping that this will resolve sooner than later!
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
Hi zad - that sounds like good news. I have a similar report; I spoke with the agent I had worked with previously, who went through every account for every year - noting some had penalties assessed, but all had been abated, with a final balance of zero. The agent noted that other letters of penalty will be wokring their way through the system and the mail, but that abatement letters woudl be coming afterwards. I am hopeful that is all there is to this situation. The agent's response was reasonable, and if her description is accurate then this resolution is the right one.
I still hold my initial belief; when you work with an individual and present them with the situation, you tend to get helped. Perhaps not necessarily on an ideal time line, but it seems to work out in the end if you are in the right. Eventually. I think. I still believe that the system and process are not optimal for either the citizen nor the IRS, however, and probably result in missed opportunities for the IRS to spend resources catching actual tax evaders (rather than guppies whose crime is that they were unaware of a form - which tends to work out as no penalty but lots of hassle on both sides).
I do wonder about simply getting rid of these accounts, however, so that I don't have to file this mess again!
I still hold my initial belief; when you work with an individual and present them with the situation, you tend to get helped. Perhaps not necessarily on an ideal time line, but it seems to work out in the end if you are in the right. Eventually. I think. I still believe that the system and process are not optimal for either the citizen nor the IRS, however, and probably result in missed opportunities for the IRS to spend resources catching actual tax evaders (rather than guppies whose crime is that they were unaware of a form - which tends to work out as no penalty but lots of hassle on both sides).
I do wonder about simply getting rid of these accounts, however, so that I don't have to file this mess again!
Not a professional opinion.
That's really awesome news CdnAmerican!! :D
My sentiments exactly! [quote="CdnAmerican"]I still hold my initial belief; when you work with an individual and present them with the situation, you tend to get helped. Perhaps not necessarily on an ideal time line, but it seems to work out in the end if you are in the right. Eventually. I think. I still believe that the system and process are not optimal for either the citizen nor the IRS, however, and probably result in missed opportunities for the IRS to spend resources catching actual tax evaders (rather than guppies whose crime is that they were unaware of a form - which tends to work out as no penalty but lots of hassle on both sides). [/quote]
Are you really thinking of getting rid of your TFSA accounts? If you don't mind me asking, do you have them invested in stocks or just plain gic/savings? Mine is just the latter. I'm still thinking of keeping my account open...hoping the reporting requirements will ease up in the future, just like the RRSPs...or better yet, that the US will treat it as a pension account and ultimately be tax free!!
My sentiments exactly! [quote="CdnAmerican"]I still hold my initial belief; when you work with an individual and present them with the situation, you tend to get helped. Perhaps not necessarily on an ideal time line, but it seems to work out in the end if you are in the right. Eventually. I think. I still believe that the system and process are not optimal for either the citizen nor the IRS, however, and probably result in missed opportunities for the IRS to spend resources catching actual tax evaders (rather than guppies whose crime is that they were unaware of a form - which tends to work out as no penalty but lots of hassle on both sides). [/quote]
Are you really thinking of getting rid of your TFSA accounts? If you don't mind me asking, do you have them invested in stocks or just plain gic/savings? Mine is just the latter. I'm still thinking of keeping my account open...hoping the reporting requirements will ease up in the future, just like the RRSPs...or better yet, that the US will treat it as a pension account and ultimately be tax free!!
I don't know whether to laugh or cry. At least reading Zad and CdnAm's postings give me hope and an idea on how to proceed on my case.
MAY
I received letters in late May indicating a penalty for filing my 3520As late unless an explanation was forwarded.
JUNE
I sent my explanation letter in mid-June and heard nothing.
AUGUST
In late August, I received a second set of penalty letters and panicked. Called IRS, they claim they never received June letter. I sent registered copies of my original June letter, and faxed it for good measure.
Then a day later (yes, 1 day) I received letters dated early Sept stating that no penalty would be applied based on my mid-June letter. Phew. Or so I thought.
SEPTEMBER
Then two weeks later, I received a letter stating that a penalty was assessed on my account. What gives?
TOMORROW
I will try speaking to someone in the business office bright and early. This has been nothing but a paperwork exercise from the form letters to the phone calls to the additional responses and all for a set of 'information' forms.
MAY
I received letters in late May indicating a penalty for filing my 3520As late unless an explanation was forwarded.
JUNE
I sent my explanation letter in mid-June and heard nothing.
AUGUST
In late August, I received a second set of penalty letters and panicked. Called IRS, they claim they never received June letter. I sent registered copies of my original June letter, and faxed it for good measure.
Then a day later (yes, 1 day) I received letters dated early Sept stating that no penalty would be applied based on my mid-June letter. Phew. Or so I thought.
SEPTEMBER
Then two weeks later, I received a letter stating that a penalty was assessed on my account. What gives?
TOMORROW
I will try speaking to someone in the business office bright and early. This has been nothing but a paperwork exercise from the form letters to the phone calls to the additional responses and all for a set of 'information' forms.
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
Hi shopgirl - just happened to pop on and see your post. I'm sorry about your experience - it sounds a lot like mine, which may or may not be a good thing. When I last spoke with an agent (who has been terrific), she noted that my penalties had been abated (removed). This was in contrast to a bill that I received for $10K which was nerve-racking. She said that this may be followed by a more formal bill, which would then be followed by letters indicating the penalty had been abated. That, it turns out, is exactly what has happened so far. Further, there may be more penalty letters/bills, but these will be followed by penalty removal letters. My suspicion is that bills are sent more quickly than penalty removal letters!
There is one strategy you could try tonight if it will help you possibly sleep better. I *think* that if you call tonight and get a night agent, they can at least tell you whether or not you actually have anything owing on your account this year. I was in a spot where I had a large bill, but that when the agent looked at my account, I did not actually owe anything. While I would be reluctant to get into any situation too deeply with an agent at this time of night, I think you could easily enough have them track your account based on SSN and the year of the bill (I would not even bother trying to describe the 3520 - just see if they think you owe money, and leave it at that). It is possible that you actually have nothing owing. Not probable, but at least possible.
The good news is that you have a letter idnicating that you have no penalty. My sense is that the bill-writing computer works much more quickly than the other computer :) and that as a result, sometimes bills come out that are not correct.
So hopefully, all is ultimately well with your account. This is a stressful process but once you can speak to a person in the know, this should help out. Keep in mind nelsona's prior comments that folks do not ultimately get penalized for self-reporting a late 3520. I still have never seen a post from someone who filed the 3520 late, in good faith, and was still fined. I HAVE seen numerous posts where people filed the 3520 late and dealt with a bit of hassle, but which have worked out in the end. Not sure if that helps or not.
Zad, in response to your note, I did indeed close my TFSA (just a plain savings account) as it was more hassle than it's worth. My question now is whether or not to just close all these accounts (e.g., child's savings accounts, RESP) so I don't have to mess with it anymore. That would be too bad, but I do look forward to a day where I don' t have to worry about whether I will be getting a scary letter in the mail...
There is one strategy you could try tonight if it will help you possibly sleep better. I *think* that if you call tonight and get a night agent, they can at least tell you whether or not you actually have anything owing on your account this year. I was in a spot where I had a large bill, but that when the agent looked at my account, I did not actually owe anything. While I would be reluctant to get into any situation too deeply with an agent at this time of night, I think you could easily enough have them track your account based on SSN and the year of the bill (I would not even bother trying to describe the 3520 - just see if they think you owe money, and leave it at that). It is possible that you actually have nothing owing. Not probable, but at least possible.
The good news is that you have a letter idnicating that you have no penalty. My sense is that the bill-writing computer works much more quickly than the other computer :) and that as a result, sometimes bills come out that are not correct.
So hopefully, all is ultimately well with your account. This is a stressful process but once you can speak to a person in the know, this should help out. Keep in mind nelsona's prior comments that folks do not ultimately get penalized for self-reporting a late 3520. I still have never seen a post from someone who filed the 3520 late, in good faith, and was still fined. I HAVE seen numerous posts where people filed the 3520 late and dealt with a bit of hassle, but which have worked out in the end. Not sure if that helps or not.
Zad, in response to your note, I did indeed close my TFSA (just a plain savings account) as it was more hassle than it's worth. My question now is whether or not to just close all these accounts (e.g., child's savings accounts, RESP) so I don't have to mess with it anymore. That would be too bad, but I do look forward to a day where I don' t have to worry about whether I will be getting a scary letter in the mail...
Not a professional opinion.