MICHEL STEIN, EDWARD ROBBINS, JR. and ROBERT HORWITZ to Speak at Upcoming Strafford Webinar
Posted by Hochman Salkin Toscher Perez P.C. 
Posted on Wednesday, June 21, 2023
We are pleased to announce that Michel Stein, Edward Robbins, Jr. and Robert Horwitz will be speaking at the upcoming Strafford webinar “Foreign Information Return Penalties After Farhy: Case Review and Updates, Penalty Abatements, Refund Claims,“ Tuesday, June 27, 2023, 10:00 a.m. – 11:50 a.m. (PST).
The Supreme Court, in Bittner v. United States, limited the imposition of FBAR filing penalties to a single penalty per form rather than penalizing the taxpayer for each foreign account, astronomically reducing the amount the IRS can assess taxpayers for improperly filing these information returns. This decision, and the more recent outcome in Farhy v. Commissioner, stand in stark contrast to the many cases over the years imposing astounding penalties for non and late filing of foreign information returns.
In Farhy v. Commissioner 160 T.C. No. 6 (T.C. Apr. 3, 2023), the Tax Court ruled that the IRS did not have the authority to assess and collect penalties under IRC Section 6038(b) for failure to file Forms 5471. The IRS will likely appeal the Farhy decision but now would need to file a civil action to collect these penalties. In the interim, international tax advisers must reassess the status of late and non-filed foreign information reports. The ramifications of this ruling could apply to other forms, including Forms 5472, 8858, 8938, 926, and perhaps even the 3520.
For tax practitioners bombarded with multiple penalties in increments of, and no less than, $10,000 each for multiple clients, the Farhy decision offers the opportunity for substantial refunds of erroneously assessed penalties. It also opens the door to a multitude of questions on eligibility and applying for relief.
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