OVDI - Got IRS Letter to extend time to assess tax and penalties

sargein · Post by **sargein** » Mon Sep 17, 2012 11:19 am

I had filed the OVDI docs in 2011, and just received a letter from IRS asking to sign the form to further extend time to assess tax and civil penalties to June 30, 2014. Such a bummer, as I was hoping to finish this off this year and move on.

Has anyone else received similar letter? Is there any option to request them to finish it this year, or is just signing it the only option?

Thanks!

zyzy · Post by **zyzy** » Thu Sep 20, 2012 7:47 am

sargein;474193I had filed the OVDI docs in 2011, and just received a letter from IRS asking to sign the form to further extend time to assess tax and civil penalties to June 30, 2014. Such a bummer, as I was hoping to finish this off this year and move on.

Has anyone else received similar letter? Is there any option to request them to finish it this year, or is just signing it the only option?

Thanks!

A friend of mine (who is in the OVDI like me) also received this letter but I haven't received any such letter so far.

Did everybody on this forum who are in the OVDI receive this letter? Pl let me know.

I sent my package in early Dec 2011.

Thanks.

zen · Post by **zen** » Thu Sep 20, 2012 9:34 pm

I haven't received any letter or communication from IRS yet. I had filed in August 2011. I checked with my attorney and he said that there is substantial delay in IRS processing. Many of his clients haven't received anything yet.

zyzy · Post by **zyzy** » Mon Oct 22, 2012 8:47 am

Sargein/Zen and others,

What is the status of your case?

I also received the "Extend time to assess..." letter a couple of days ago. The friend (who I referred to in my above post) received his 906 closing statement less than a month after sigining and sending back this letter.

I see the name of an agent on this letter. Does this mean that my case has been assigned and I am near the finish line (though I will most probably opt out)?

zen · Post by **zen** » Mon Oct 22, 2012 9:42 am

zyzy;477406Sargein/Zen and others,

What is the status of your case?

I also received the "Extend time to assess..." letter a couple of days ago. The friend (who I referred to in my above post) received his 906 closing statement less than a month after sigining and sending back this letter.

I see the name of an agent on this letter. Does this mean that my case has been assigned and I am near the finish line (though I will most probably opt out)?

My attorney got a call from some IRS agent informing him about extending the time to assess tax and penalties on my application. He however told my attorney that he is not representing my case but the IRS has to do this due to backlog on cases. I'm planning on meeting my attorney this week to discuss more about this. I don't think we have much choice here than to extend it.

SriniSri · Post by **SriniSri** » Mon Oct 22, 2012 7:57 pm

Hi, We too got a letter from IRS for the extension. We called IRS agent listed on the letter, and he mentioned that IRS didnt expect these many applications but due to the huge volume they are falling behind and sent these letters. So, he mentioned to have it signed by my CPA, us and send it back. We spoke to our CPA and he too mentioned that few of his other clients also got this letter and not to worry. So we have send the forms back to IRS.

zyzy · Post by **zyzy** » Mon Oct 22, 2012 8:47 pm

Thanks Guys.

I am not worried about the letter (I will sign and send it back).

I was only wondering whether the receipt of this letter indicated that we are any closer to the resolution of the case. At the very least - the letter seems to suggest that our case has been assigned an agent as there is an agent name mentioned on the letter.

Its interesting though that the IRS says in the letter that since "we promised to cooperate" - we must sign this letter. Yes, we promised to cooperate about the facts of our OVDI case, does that mean cooperating with inefficiencies on the IRS side - like substantial delays on their side in our case handling? I am not quite sure. But they make the rules and carry a big stick - so I guess they can interpret it any way they want to.:(

manenkothari · Post by **manenkothari** » Fri Nov 02, 2012 8:06 am

zyzy;477436Thanks Guys.

I am not worried about the letter (I will sign and send it back).

I was only wondering whether the receipt of this letter indicated that we are any closer to the resolution of the case. At the very least - the letter seems to suggest that our case has been assigned an agent as there is an agent name mentioned on the letter.

Its interesting though that the IRS says in the letter that since "we promised to cooperate" - we must sign this letter. Yes, we promised to cooperate about the facts of our OVDI case, does that mean cooperating with inefficiencies on the IRS side - like substantial delays on their side in our case handling? I am not quite sure. But they make the rules and carry a big stick - so I guess they can interpret it any way they want to.:(

As long as you are not planning to Opt out, there is no harm signing both consent to extend statute. Allowing consent to extend FBAR statute could be expensive if you opt out. On number of client situations, we denied to sign consent to extend FBAR statute.

Manen,
Manendra Kothari, CPA
SK Tax Associates, CPAs

Ph: 847.524.0001

Circular 230 Disclaimer:
To ensure compliance with the requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

zyzy · Post by **zyzy** » Sun Nov 04, 2012 9:05 pm

manenkothari;478324As long as you are not planning to Opt out, there is no harm signing both consent to extend statute. Allowing consent to extend FBAR statute could be expensive if you opt out. On number of client situations, we denied to sign consent to extend FBAR statute.

Manen,
Manendra Kothari, CPA
SK Tax Associates, CPAs

Now you tell me Kothari Ji. I already signed and sent both the forms.

On another forum though - a tax attorney is saying that, even if you opt out, it really does not matter whether you have consented to extend FBAR statute (in practical terms that is). That's because IRS has enough tools to get the same money out of you even within the statute years. So for example - if you did not consent and opted out - years 2004, 2005 and 2006 may be out of FBAR Penalty Calculation - but IRS can impose the same overall penalty amount by upping the penalty for the years within the statute (2007,2008, 2009 and 2010). They have a very broad penalty range to dip into.

Also, signing this extension consent makes you a "good boy" in the eyes of the IRS - or so it would seem. After all they have said that not signing is tantamount to "non-cooperation".

But frankly - who knows? I am keeping my fingers crossed. I was never a candidate for OVDI in the first place. Got into this mess due to panic followed by abundance of misplaced caution when I could have just amended my returns and argued "reasonable cause" (which in my case is the truth anyway).