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On April 3, 2023, the United States Tax Court, in Farhy v. Commissioner held that the IRS has no authority to assess and collect penalties under IRC Section 6038(b)(1) and (2), for failing to file Form 5471. For about 15 years the IRS has made foreign reporting penalties a cornerstone of its enforcement. In the last several years, taxpayers have been assessed penalties without any review prior to assessment. The Farhy decision provides hope for taxpayers that change is coming.
Learn what the Farhy case means for foreign penalties, what other penalties the decision might apply to, and how to address previous penalties that might be affected by the Farhy case. The panel features Edward Robbins, Jr., Mr. Farhy’s attorney, and Zhanna Ziering, and Jonathan Kalinski, two experts in international penalties.
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