Jack Townsend, in his Federal Tax Crimes Blog, discusses the effects of new Internal Revenue Manual provision on compromises of tax liability in his article “New IRM provision on Offers in Compromise Including FBAR Penalties.” The summary is as follows:
1. I am not sure how or if compromises of the FBAR penalties may be achieved. I assume that there is some way to do that outside the IRS processes for tax liabilities.
2. The known route to compromises of tax liabilities may be a side benefit of avoiding an FBAR penalty assessment under the various IRS programs (e.g., OVDP and Streamlined) where a substitute penalty is assessed as a miscellaneous tax penalty (sometimes called the “in lieu of” penalty).
Posted by Elise Kim, Managing Associate Editor, Wealth Strategies Journal.