Posted by: Steven Toscher | April 4, 2023

Tax Court Invalidates IRS Assessment Authority for Penalties For Unfiled Forms 5471

We are pleased to announce that we have won a major victory in the United State Tax Court with the Court holding the Internal Revenue Service does not have authority under the Internal Revenue Code to assess penalties for the failure to file Forms 5471. Farhy v. Commissioner, 160 T.C. No. 6, (April 3, 2023). The IRS excessive assessment of foreign penalties has been a concern to the tax practitioner community for a number of years now.

Congratulations to Edward Robbins of our office for helping to establish this important precedent which invalidated the IRS authority to assess these penalties. 

Stay tuned. We expect this decision to have a significant impact in the foreign enforcement area. Any taxpayer who has paid these penalties should consult with their tax advisor about filing a claim for refund. 

Click Here for the Opinion

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