8.11.6  FBAR Penalties

Manual Transmittal

November 13, 2014

Purpose

(1) This transmits revised IRM 8.11.6, Penalties Worked in Appeals, FBAR Penalties.

Material Changes

(1) Updated references and made editorial changes throughout.

(2) Incorporated Interim Guidance Memorandum AP-08-0714-0004 dated July 2, 2014.

(3) Revised IRM 8.11.6.1 to explain that Form TD F 90-22.1 is obsolete and has been replaced with FinCEN Form 114. Changed reference of Bank Secrecy Act Filing System to FinCEN's BSA E-Filing System. Changed reference of Currency Banking and Retrieval System to FinCEN Query System. Removed reference to Fast Track Mediation. Clarified how a taxpayer may seek a FBAR claim for refund.

(4) Revised IRM 8.11.6.2 for the amount of time remaining on the statute of limitations before Appeals will accept a pre-assessed penalty case. Explained when Form 13535 will not be part of the case file. Clarified letters contained in a FBAR penalty file. Added that Form 13449 will be part of the case file. Clarified when an IRS Counsel opinion memorandum will be included. Added clarification on complying with ex parte requirements.

(5) Revised IRM 8.11.6.3.1 to update examples and to clarify that FBAR cases must be assessed with at least 90 days remaining on the assessment statute.

(6) Revised IRM 8.11.6.3.1.1 to correct the collection statute of limitations on offsetting payments.

(7) Revised IRM 8.11.6.5 to clarify the entity information to be verified in FBAR cases, added clarification for Form 2848 requirements in FBAR cases, updated statute date table, and clarified steps for ATEs to take to resolve discrepancies.

(8) Revised IRM 8.11.6.6 to clarify when a new Form 13449 is needed.

(9) Moved CARATS codes to IRM 8.11.6.8. Added a reference on shipping Personally Identifiable Information (PII).

(10) Revised IRM 8.11.6.8.1 to clarify handling of premature referrals.

(11) Revised IRM 8.11.6.8.2 to explain the types of closing letters, provided clarification on Form 5402 preparation when cases contain both pre and post-assessed penalties, and explained that Form 13449 is not required in an unagreed case unless Exam's numbers have changed.

(12) Revised IRM 8.11.6.8.3 to explain the types of closing letters used.

(13) Revised IRM 8.11.6.9 to clarify information needed in the FBAR administrative file.

Effect on Other Documents

This supersedes IRM 8.11.6 dated October 28, 2013.

Audience

Appeals employees

Effective Date

(11-13-2014)


John V. Cardone
Director, Policy, Quality and Case Support

8.11.6.1  (11-13-2014)
FBAR Overview

  1. The Financial Crimes Enforcement Network (FinCEN) delegated its enforcement authority to the IRS for penalties imposed under Title 31, Sections 5314 - 5321 for the failure to file FinCEN Form 114 , Report Of Foreign Bank And Financial Accounts (FBAR) . This delegation was effective April 8, 2003, by memorandum of agreement between FinCEN and IRS.

  2. A United States person must file an FBAR (FinCEN Form 114, Report of Foreign Bank and Financial Accounts, ) if that person has a financial interest in or signature authority over any financial account(s) outside of the United States and the aggregate maximum value of the account(s) exceeds $10,000 at any time during the calendar year. Failure to file this form may result in civil and/or criminal penalties. The civil penalties may be appealed.

    Note:

    Form TD F 90-22.1 is now obsolete as it was replaced with FinCEN Form 114.

  3. FinCEN has introduced new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, for filers who submit Reports of Foreign Bank and Financial Accounts (FBARs) jointly with spouses, or wish to submit them via third-party preparers.

  4. Effective July 1, 2013, filers must electronically file the FBAR through the FinCEN's BSA E-Filing System.

  5. Filings can be researched on the FinCEN Query System (FCQ) or on Integrated Data Retrieval System (IDRS) using command code (cc): IRPTRO. Penalty cases, assessments and payments are recorded on a separate FBAR database maintained by the Enterprise Computing Center in Detroit (ECC).

  6. Post-assessed FBAR cases in excess of $100,000 cannot be compromised by Appeals without approval of Department of Justice (DOJ). See 31 USC § 3711(a)(2) and 31 CFR § 902.1(a) and (b). Once assessed, the penalty becomes a claim of the U.S. Government.

  7. Pre-assessed FBAR penalties are eligible for Fast Track Settlement only if the FBAR 30-day Letter 3709, has not been issued to the taxpayer. Refer to IRM 8.26.2, Fast Track Settlement for Small Business/Self Employed (SB/SE) Taxpayers .

  8. Once FBAR penalties have been assessed, Alternative Dispute Resolution (ADR) is not available.

  9. Post Appeals Mediation (PAM) is not available in any FBAR penalty case.

  10. Refer to IRM 4.26.16.4.6, Mitigation, for mitigation threshold conditions for FBAR penalties.

  11. There is no joint and severable liability with FBAR penalty cases.

  12. Interest on FBAR penalties does not accrue until the penalty is assessed, and is payable only if full payment of the FBAR penalties is not made within 30 days of assessment..

  13. Unagreed FBAR cases are closed immediately to ECC for assessment. A statutory notice of deficiency is not issued.

  14. Title 11 Bankruptcy does not provide relief for FBAR penalty debt.

  15. FBAR penalties may come to Appeals as stand-alone cases or together with a related income tax or international penalty.

  16. FBAR penalties are an Appeals Coordinated Issue and require a referral to International Operations prior to holding the first conference.

  17. The FBAR penalty case will usually be received in Appeals pre-assessment. However, upon request, Appeals will also conduct post-assessment hearings as provided in Title 31 CFR § 5.4 and § 900 to consider FBAR penalty liability and collection.

    Note:

    Post-assessment FBAR penalty cases are priority cases and must be worked expeditiously. Appeals requires these cases be completed and approved within 120 days of assignment. This is calculated from the Appeals Officer assigned date (ASGNDATE) to the date the Appeals Team Manager (ATM) approves the case for closing (ACAP date).

  18. The venue for challenging FBAR penalties is the United States District Court and the Federal Court of Claims, not the United States Tax Court.

    Note:

    Taxpayers seeking to challenge a FBAR penalty after it has been assessed may either (1) pay the penalty and file a refund suit, or (2) wait until the government files suit in district court to collect the penalty and challenge the assessment.

  19. Refer to additional FBAR Resource materials available:

    • IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR). It should be used as a reference for background and statute information.

    • IRM 4.26.17, Report of Foreign Bank and Financial Accounts (FBAR) Procedures.

    • LB&I website http://lmsb.irs.gov/hq/pqa/Post-filing/pfa_FBAR_Home.asp

    • SB/SE website http://mysbse.web.irs.gov/aboutsbse/frdbsa/default.aspx

    • IRS.gov http://www.irs.gov

    • FinCEN website http://bsaefiling.fincen.treas.gov

8.11.6.2  (11-13-2014)
FBAR Administrative Case Files

  1. Appeals requires 365 days remaining on the assessment statute of limitations at the time the administrative file is received in Appeals. Return cases with less than 365 days remaining on the assessment statute of limitations at the time the case is received by Appeals to the originating function as a premature referral so an extension may be secured or the penalty assessed. If the penalty is assessed, the taxpayer will be given post-assessment appeal rights and the 365 day statute requirement is no longer applicable. Refer to IRM 8.11.6.3.1 for information on the statute of limitations for FBAR cases. If a FBAR case is being returned to Examination with new information, there must be at least 210 days remaining on the statute of limitations at the time Examination receives the case. Refer to IRM 8.6.1.6.7, Jurisdiction Released.

    Exception:

    When Examination sends back a previously returned case, there must be 180 days remaining on the statute of limitations when received by Appeals.

    Note:

    The FBAR penalty is assessed separately and not jointly. There should be one individual under examination per FBAR case file.

  2. Administrative files are generally forwarded to the Appeals Office by:

    Type of FBAR case Sent by
    Post-assessed FBAR penalty

    Note:

    Verify penalty assessment by reviewing Form 13448Penalty Assessment Certification Summary (Title 31 "FBAR") .

    The FBAR Penalty Coordinator at the Enterprise Computing Center
    Pre-assesed FBAR penalty Compliance Technical Services

    Note:

    If you need information on the penalty assessment, you can email "*SBSE BSA Compliance - FBAR Penalty Coordinator" or contact the Appeals FBAR Coordinator. The FBAR Coordinator can be found in the Appeals Domestic & International Issue Locator by searching either Issue:FBAR or UIL:9999-99-01 (Uniform Issue List) on the Domestic & International Issue Locator.http://appeals.web.irs.gov/TG_locator/application/query.asp.

  3. The administrative file will contain the following documents:

    • A brief summary memorandum explaining the FBAR violation(s) which includes:

      Item Number Description
      1. A discussion of the FBAR violations.
      2. The number of penalty assessments.
      3. The penalty calculation and dollar amounts.
      4. The FBAR case disposition.
    • A Form 13535, Foreign Bank and Financial Accounts Report Related Statute Memorandum, signed by the designated Territory Manager affirming that the information shows the FBAR violations were committed in furtherance of income tax violations, when appropriate. For exceptions where Form 13535 will not be in the case file, refer to IRM 4.26.17.2.3, Cases where No Related Statute Memorandum (RSM) Needed.

    • FBAR issue workpapers

    • Copy of FBAR 30-Day Letter

      Note:

      Letter 3709, FBAR 30 day letter. This letter will be in the case file for both pre and post-assessed FBAR penalties.

      Note:

      Letter 3708, Notice and Demand for Payment of FBAR Penalty. This letter is issued by ECC to the taxpayer after the penalty has been assessed. This letter will be in the case file only for post-assessed penalty cases and is only issued if the penalty has not been paid in full.

    • Form 13449, Agreement to Assessment and Collection of Penalties under 31 U.S.C. 5321(a)(5) and 5321(a)(6).

    • Taxpayer's protest. The protested years should be the same as the years on the case summary card.

      Caution:

      The years listed on the Case Summary Card (CSC) must match the years on the Letter 3709, Form 13449, and the years protested by the taxpayer. If they do not, seek guidance from the Appeals FBAR Coordinator.

    • FBAR/Title 31 Power of Attorney Form 2848, if applicable.

    • IRS Counsel Opinion memo for FBAR penalties (For Large Business & International (LB&I) sourced cases that are not International Individual Compliance (IIC), this applies to willful penalties over $10,000 only).

    • If it is not clear that the summary memorandum was shared with the taxpayer, follow the appropriate ex parte requirements.

8.11.6.3  (11-13-2014)
FBAR Statute of Limitations

  1. The statutes of limitations on assessment statute expiration date (ASED) and collection statute expiration date (CSED) of FBAR civil penalties is found in 31 U.S.C. 5321(b)(1) and 5321(b)(2), respectively.

  2. FBAR penalty cases may be sent to Appeals either pre-assessment or post-assessment.

  3. Appeals controls the statute of limitations in pre-assessment cases with the ASED and in post-assessment cases with the applicable CSED.

  4. Statute of limitations must be determined on each individual under examination.

    Note:

    Married couples under FBAR examination are treated as individual cases and an extension must be obtained from each individual under examination.

8.11.6.3.1  (11-13-2014)
FBAR Penalty Statute of Limitations on Assessment (ASED)

  1. The ASED of FBAR penalties is defined under Title 31, the Bank Secrecy Act.

    TYPE OF VIOLATION ASED
    Failure to file FBAR report (either willful or non-willful) 6 years from the due date of the FBAR report (Due date is 06/30/YYYY)
    Failure to maintain required records (either willful or non-willful) 6 years from the date the IRS first asks for the records
    • For questions concerning extending the time to assess an FBAR penalty and for a copy of the consent form, contact the Appeals FBAR Coordinator.

    • Use the Title 31 statute extension form.

    • An Appeals Officer has the authority to execute a Title 31 FBAR statute extension. See IRM 1.2.52.14, Delegation Order 25-13 (formerly DO 4-35, Rev. 1).

    Examples
    Example 1: In calendar year 2013, a foreign bank account owned by a U.S. person exceeds $10,000.00. The Report of Foreign Bank and Financial Accounts (FinCEN Form 114) was due June 30, 2014, but the account holder does not file one. The assessment statute of limitations for failing to file an FBAR report expires June 30, 2020.
    Example 2: Same facts as in Example 1, and in addition, the account holder failed to maintain required records. An examiner requested the records on March 1, 2015. The assessment statute of limitations for failing to maintain required records expires on March 1, 2021.

    Note:

    If both types of violations have occurred, examiners can assert both the failure to file a FBAR report penalty and failure to maintain required records penalty on the same account for the same period. However, Compliance policy in 4.26.16.4.7, FBAR Penalties - Examiner Discretion, allows examiners discretion over whether to assert multiple violations against one FBAR report.

  2. For procedures on protecting the statute of limitations, refer to IRM 8.21.3.1.3.1, Protecting Statues, General Guidelines.

  3. For information on preparing consents, refer to IRM 8.21.3.1.3.3, Consent Processing, in conjunction with advice from a Counsel FBAR coordinator.

  4. FBAR penalty cases in Appeals must be assessed with at least 90 days left on the statute to allow processing of the assessment certification Form 13448, Penalty Assessment Certification Summary.

8.11.6.3.1.1  (11-13-2014)
FBAR Penalty Statute of Limitations on Collection

  1. On post-assessment FBAR cases only the collection statute expiration date (CSED) will be entered on ACDS (Appeals Centralized Database System) to control the statute of limitations.

  2. There are two separate collection limitation periods for FBAR cases and they run concurrently:

    • CSED Explanation
      2-year limitation on filing suit period in which the Government may file a civil action to recover an FBAR penalty
      No statute limitation on offsetting payment period in which the Government may obtain payment of the FBAR by offsetting payments
  3. The following table provides information on when to use the 2-year date or limitation for offsetting payment:

    If Assessed FBAR received Statute Date Statute Code
    30 days before the expiration of the 2-year CSED enter a date 2 years from the date of assessment enter statute code FBAR2
    within 30 days of or after the 2-year CSED Blank enter statute code FBAR10

8.11.6.4  (11-13-2014)
Establishing FBAR Penalty Cases on ACDS

  1. For Account and Processing Support (APS) procedures regarding establishing FBAR cases on ACDS, refer to IRM 8.20.5.27, Foreign Bank Account Report (FBAR) Penalty Cases.

8.11.6.5  (11-13-2014)
Appeals Technical Employee (ATE) Procedures for FBAR Penalty Cases

  1. All FBAR penalty cases are controlled on ACDS.

  2. Initial review of the case file is required within 5 days from the assignment date on ACDS.

  3. Upon receipt of the case, the ATE will verify the Case Summary Card (CSC) information and make or request changes as required.

  4. Verify the entity information: :

    1. Taxpayer Name is the U.S. person subject to the FBAR penalty and could include an individual citizen or resident of the United States or a U.S. entity (includes corporations, partnerships, LLCs, estates, trusts, and any other legal entity formed in the U.S.)

    2. Taxpayer Identification Number (TIN ) to ensure correct account is controlled on ACDS

    3. MFT = 00

    4. Type code = FBAR

    5. Feature Code = AI, IC and IT and any others which apply

    6. Category Code = Other

    7. UIL Code= 9999.99-01

    8. AIMS indicator = E (exempt). FBAR cases are not controlled on AIMS (Audit Information Management System)

    9. POA/Representative information:

      Note:

      Form 2848 was developed to meet requirements relating to tax. It is generally inappropriate for Title 31 BSA examinations, including FBAR examinations. If the Related Statute Memorandum (RSM), Form 13535 has been secured by Exam, the Form 2848 may be used for FBAR purposes. Line 3 on the Form 2848 reflects the description of the matter in the first column, tax form number in the second column, and years and period in the third column. The words, "Foreign Bank and Financial Accounts Report Matters" must be added in the first column, FinCEN Form 114 added to the second column and the tax periods at issue covered by the Representative's authority in the third column. See IRM 4.26.17.5.2, FBAR Power of Attorney, for more information on valid power of attorney and when a RSM has not been secured.

    10. STATDATE (statute date) and STATCODE (statute code) must be validated within 5 days of receipt. See IRM 8.21.3, Appeals Technical Statute Responsibility. The appropriate entries on these fields are dependent upon whether the penalty is pre or post-assessed. See table below for the appropriate entries.

      If FBAR Penalty is: STATDATE (statute date) CODE (statute code)
      Not assessed 6 years from the date of the violation, either the due date of the FBAR report or date on which records requested. Blank
      Assessed with more than 30 days before the expiration of the 2-year CSED 2 years from the date of assessment FBAR2
      Assessed and within 30 days of the expiration of the 2-year CSED or the CSED has expired Blank FBAR10
    11. Tax Years: Verify the protested years match ACDS tax years. If the years don't match, contact the Appeals FBAR Coordinator.

      Note:

      The Appeals FBAR Coordinator will notify Examination of the discrepancy. If necessary, Examination will either send or prepare Form 13536, FBAR Monitoring Document, to ECC to have the tax year corrected by either closing or establishing the year in ECC. Once the tax year has either been opened or closed by ECC, ACDS must be updated accordingly.

    12. Penalty Amount: Verify the penalty amount for each period is accurate.

    13. For pre-assessed penalty cases, update per the amounts on Form 13449, Agreement to Assessment and Collection of Penalties Under 31 U.S.C. 5321(a)(5) and 5321(a)(6).

    14. For post-assessed penalty cases, update per the amounts on Form 13448, Penalty Assessment Certification Summary (Title 31 FBAR). Form 13448 is verification from ECC the penalty has been assessed.

  5. Prepare and forward a referral through the ATM to Specialty Operations on ACDS using Form 13381, Appeals Technical Referral, when the case is received by the ATE.

    1. Request the International Technical Specialist (ITS) as a consultant.

    2. A list of Appeals Coordinated issues, the responsible ITS and their ATM can be found at http://appeals.web.irs.gov/TG_locator/application/query.asp.

  6. Post-assessment FBAR penalty cases are priority cases and must be worked expeditiously. Appeals requires these cases be worked and closed within 120 days of assignment to an ATE (assignment to ACAP).

  7. Verify the Uniform Acknowledgment Letter (UAL), Letter 4141, was generated and issued to the taxpayer with Pub 4227, Overview of the Appeals Process, explaining the Appeals process and taxpayer's rights.

    Note:

    Do not include Pub 4167, Appeals - Introduction to Alternative Dispute Resolution, and Notice 1016, How to Stop Interest on Your Account, as they are not applicable to FBAR cases.

8.11.6.6  (11-13-2014)
Payment Procedures for FBAR Case

  1. If payment is received on an FBAR penalty case:

    • Photocopy the check or money order and attach to the original Form 13449, Agreement to Assessment and Collection of Penalties Under 31 USC 5321(a)(5) and 5321(a)(6).

    • Complete Form 3210, Document Transmittal, describing all documents attached.

    • Forward the original payment with a copy of the Form 13449, Agreement to Assessment and Collection of Penalties Under 31 U.S.C. 5321(a)(5) and 5321(a)(6), and Form 3210, Document Transmittal, by UPS Overnight mail to the following address:

    Internal Revenue Service

    Enterprise Computing Center

    Attn: FBAR Coordinator

    985 Michigan Ave

    Detroit, MI 48226

    Tel 313-234-1611

    Fax 313 234-2278

    Email *SBSE BSA Compliance-FBAR Penalty Coordinator

    • Send Form 13449 , Agreement to Assessment and Collection of Penalties Under 31 U.S.C. 5321(a)(5) and 5321(a)(6), to ECC to assess the penalties prior to closing the case from Appeals. No signature is required on the Form 13449. ECC will provide a copy of the Form 13448 , Penalty Assessment Certification Summary (Title 31 "FBAR"), for verification of assessment to put in the case file.

  2. DO NOT USE Form 3244, Payment Posting Voucher, when processing a payment on an FBAR penalty case. See IRM 8.11.6.7 when this occurs to resolve the problem.

  3. The information above is also available in IRM 4.26.17.4.5Closing the FBAR Case - Payment.

8.11.6.7  (11-13-2014)
Problems Related to FBAR Case Payment Posting

  1. Form 3244, Payment Posting Voucher, is not used to post the payment for FBAR penalty cases.

  2. If Form 3244, Payment Posting Voucher, is inadvertently executed take the following steps:

    • The Appeals employee will be responsible for tracing the payment to ensure that it is refunded from the tax module.

    • The Appeals employee will then need to obtain another payment which will be sent to ECC for posting to the FBAR database.

    • Enterprise Computing Center (ECC) will record and process the payment, using, as appropriate:

      Type of Document Title
      Form 13448 Penalty Assessments Certification Summary (Title 31 FBAR) (internal document)
      Letter 3708 Notice and Demand for Payment of FBAR Penalty (copy)
      Notice 1330 Information on Making FBAR Penalty Payment by Check

8.11.6.8  (11-13-2014)
FBAR Closing Procedures

  1. Refer to IRM 8.20.7.26, Foreign Bank and Financial Accounts (FBAR) Penalty Case Closing Procedures, for APS procedures for closing all types of FBAR cases.

  2. There are three types of closings for an FBAR penalty case. Determine the type of case and follow the instructions outlined in the following sections:

    • Premature Referral

    • Pre-Assessment

    • Post-Assessment

  3. Determine the valid ACDS closing code:

    Determination Made CLOSINGCD
    Agreed or No Change - valid only for pre-assessment case 03
    Unagreed or Partially Sustained - valid only for pre-assessment case 13
    Sustained in Full - valid only for post-assessment case 14
    Not Sustained - valid only for post-assessment case 15
    Partially Sustained - valid only for post-assessment case 16
    Premature Referral - valid for either pre-assessment or post-assessment 20
  4. Case Activity Record and Automatic Timekeeping System (CARATS) codes - mandatory codes:

    CARATS code CARATS code definition
    CR Case Received
    CF/xx Conference type/xx =
    • FF - fact-to-face

    • ML - by mail

    • NN - not necessary

    • NR - no response

    • NS - no show

    • PC - telephone call

    • VC - video conference

    DM Determination Made
    AC-FR Final Determination Made

    Note:

    Additional CARATS codes will be entered to properly document case activity. Additional information relating to ACDS can be found in CARATS Operational Definitions located on the Utilities pop-up menu within ACDS.

  5. All Appeals employees must adhere to the procedures for shipping Personally Identifiable Information (PII). Refer to IRM 8.20.7.6, Procedures for Shipping Personally Identifiable Information (PII).

8.11.6.8.1  (11-13-2014)
FBAR Closing - Premature Referral

  1. Appeals may have received the income tax case or international penalty case along with the FBAR case or only the FBAR case.

  2. See the table below for information on handling the case as a premature referral:

    If Premature Referral- jurisdiction is released on the Then
    Combined FBAR case with related case
    • close combined cases

    • return to the originating Compliance office, generally the Technical Services (TS) staff

    • ATE prepares Form 5402 , Appeals Transmittal and Case Memo, if applicable, to notify the ECC FBAR Penalty coordinator jurisdiction is released.

    Income tax case only
    • return to the originating Compliance office

    • ATE prepares Form 5402, Appeals Transmittal and Case Memo.

    FBAR case only is being returned as a premature referral
    • return to the originating group

    • ATE prepares Form 5402 , Appeals Transmittal and Case Memo, to notify the ECC FBAR Penalty Coordinator jurisdiction is released..

  3. ACDS field entries for closing the premature referral. Case level entries are:

    • Closing Code: 20 - Premature Referral (Jurisdiction Released)

  4. No entries are required at the return level.

  5. The FBAR file is submitted to APS with instructions to send the transmittal Form 3210, Document Transmittal, to Technical Services or the originating group.

  6. Send a photocopy of Form 5402, Appeals Transmittal and Case Memo, and Appeals Case Memorandum (ACM) to ECC at the following address:

    Internal Revenue Service

    Attn: FBAR Penalty Coordinator

    985 Michigan Ave

    P.O. Box 33113

    Detroit, MI 48232–0113

    Email *SBSE BSA Compliance-FBAR Penalty Coordinator

8.11.6.8.2  (11-13-2014)
FBAR Closing - Pre-Assessment Case

  1. The Appeals Officer will prepare and mail the closing letter and Form 5402.

  2. The types of closing letters are:

    • Agreed cases Letter 5080

    • Unagreed cases Letter 5143

    • No change cases Letter 913

  3. If the case has both pre and post-assessed penalties, close the case as if all are post-assessed. Use the post-assessed closing codes on Form 5402.

  4. There are two types of Agreed FBAR cases:

    • Agreed with signed waiver Form 13449, Agreement to Assessment and Collection of Penalties under 31 USC 5321(a)(5) and 5321(a)(6), and itemized statement attached to Form 13449.

    • No Change case - FBAR is not sustained and signed Form 13449 is not required.

  5. An unagreed case is when the FBAR penalty is fully or partially sustained and the taxpayer does not agree. Appeals is not required to prepare Form 13449 for an unagreed case unless there is a computation error or the numbers have changed from Exam's Form 13449. Send/fax the Form 5402 and Form 13449 to the BSA FBAR Coordinator at ECC.

  6. Send Form 13449, Agreement to Assessment and Collection of Penalties Under 31 U.S.C. 5321(a)(5) and 5321(a)(6), to ECC for posting prior to closing case. ECC will send to the ATE Form 13448, Penalty Assessment Certification Summary (Title 31 "FBAR"), for verification of assessment to put in case file. Include a copy of the Form 13449 with agreed closing letter, Letter 5080 .

    Note:

    Form 13449 is not required to be sent to the taxpayer in an unagreed case when issuing Letter 5143.

  7. The FBAR Coordinator at ECC can be contacted at:

    Internal Revenue Service

    Attn: FBAR Penalty Coordinator

    985 Michigan Ave

    P.O. Box 33113

    Detroit, MI 48232–0113

    Fax (313) 234-2278

    Email *SBSE BSA Compliance-FBAR Penalty Coordinator

  8. The ATE will date and mail the letter after it is approved and signed by the Appeals Team Manager (ATM) prior to the time the case is being closed to Account and Processing Support (APS). For an unagreed case use Letter 5143, for an agreed case use Letter 5080, and for a full concession case use Letter 913.

  9. Form 5402 Closing entries :

    • Closing Codes: see table above in IRM 8.11.6.8

    • Revised Penalty - Def/OA:

      Agreement type Dollar entry for each tax period
      Agreed with waiver enter total amount of penalty agreed to
      No Change enter zero (0)
      Unagreed total amount of the penalty imposed

8.11.6.8.3  (11-13-2014)
FBAR Closing - Post-Assessment Case

  1. Post-assessment FBAR cases are priority cases and require expedited handling.

    Note:

    Pay special attention to those cases where the FBAR assessment is more than 180 days old.

  2. The ATE will prepare the closing letter and Form 5402, Appeals Transmittal and Case Memo.

  3. The types of closing letters are:

    • Agreed cases Letter 5080

    • Unagreed cases Letter 5143

    • Full concession cases Letter 913

  4. The ATE will date and mail the closing letter after it is signed by the ATM.

  5. ACDS field entries for closing post-assessment FBAR cases:

    • Closing Codes:

      ACDS Closing Code Closing Code Definition
      14 sustained in full
      15 not sustained
      16 partially sustained
    • Revised Penalty amounts:

    • Type of closing (closing code) Dollar entry for each tax period
      Sustained in full (14) enter total amount of penalty agreed to
      Not Sustained (15) enter zero (0)
      Partially Sustained (16) revised penalty amount
  6. The FBAR administrative file should contain the following additional documents at closing:

    • Form 13449, Agreement to Assessment and Collection of Penalties under 31 USC 5321(a)(5) and 5321(a)(6), and itemized attachment if agreed and Form 13448, Penalty Assessment Certification Summary (Title 31 "FBAR"), from ECC. This is the verification assessment was made.

    • Form 5402 and Appeals Case Memorandum. If the case has both pre-assessment and post-assessment penalties, close all penalties together on the same Form 5402. Use the closing code for the post-assessed year on the Form 5402.

    • FBAR penalty computation, if any changes were made

    • Appropriate closing letter dated and signed by ATM. The ATE will mail the closing letter prior to case going to APS. .

  7. APS sends the FBAR file by UPS Ground with Form 3210, Document Transmittal, to:

    Internal Revenue Service

    Enterprise Computing Center

    Attn: FBAR Penalty Coordinator

    985 Michigan Ave

    Detroit, MI 48226

    Tel. 313-234-1611

    Note:

    The email address for ECC is *SBSE BSA Compliance-FBAR Penalty Coordinator@irs.gov.

8.11.6.9  (11-13-2014)
FBAR Administrative File

  1. The following documents should be included in the administrative file:

    • Form 5402, Appeals Transmittal

    • Appeals Case Memorandum (ACM)

    • Schedule of Adjustments (SOA)

    • Form 13449, Agreement to Assessment and Collection of Penalties Under 31 U.S.C. 5321(a)(5) and 5321(a)(6), and itemized attachments

    • Copy of any checks received in Appeals

    • Closing letter which has been signed and mailed by ATE

    • CARATS activity record

    • FBAR Penalty Computation spreadsheet/worksheet

    • Copy of Form 13448, Penalty Assessment Certification Summary (Title 31 "FBAR"), ECC assessment of penalty, if applicable

    • ACDS Case summary card

    • Additional items identified as necessary


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