The IRS Letter 3219: A Final Warning and Tax Court Opportunity

The IRS Letter 3219: A Final Warning & Tax Court Opportunity

What is a Letter 3219 Notice of Deficiency (NOD): How to Respond

A letter 3219 from the Internal Revenue Service (IRS) is a Notice of Deficiency (NOD) letter, otherwise referred to as a 90-day letter (150-day letter for taxpayers living outside of the United States).  The notice of deficiency letter is an endgame notice from the IRS letting the taxpayer know that the IRS has determined the taxpayer has a deficiency for outstanding fines or penalties. The reason why this letter is so important is that it provides the taxpayer with an opportunity to challenge the IRS in U.S. Tax Court. Unlike other types of federal courts, the taxpayer does not need to pay the amount due first before challenging the IRS in Tax Court. In addition, typically, by going to Tax Court, the taxpayer gets a few more bites at the apple to settle the amount due.

Petitioning the Tax Court

When the taxpayer receives the 3219 Notices of Deficiency letter and wants to challenge the IRS, they will submit a petition to the United States Tax Court. Taxpayers can go to the U.S. Tax Court website and find information about what the process is, how to file the petition, and what they can expect after filing the petition. Depending on how much the taxpayer has due, it will impact which type of Tax Court case they are eligible for.

IRS 3219 Letter is Time-Sensitive

Taxpayers should be aware that they must respond within the 90 days (150 days for overseas taxpayers) provided by the notice. If the taxpayer does not respond timely manner, then they lose the opportunity to go to Tax Court. For example, if the taxpayer receives the notice and then decides six months later that they want to go to Tax Court, unfortunately, they have lost the right to do so.

Late Filing Penalties May Be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.