This reader has offered a narrative of her journey and the key documents in the hope that other readers will find them useful and be encouraged that, at the end of their respective journeys which, hopefully, will have fewer twists and turns, they too will achieve a fair result. In the process, she hopes that others will not be frightened to opt out because of the mere remote possibility of hypothetical onerous penalties.
Here are the links to her documents. The key document is the summary. It is extended (16 pages), but well worth the read. She presents the materials well.
- A summary (actually detailed) presentation of her journey, here.
- Her opt out letter, here.
- Her opt out reasonable cause arguments, here.
- A Streamlined Program acceptance letter, here.
- Her Letter 3800, here.
- A spreadsheet with the Agent calculation of mitigated Level II Non-Willful Penalties, here.
I think that there are some in the OVDI/OVDP programs who should opt out but do not because they fear what the IRS could do. For example, many of the agents are trained when asked about what penalties could apply on opt out to assert that the IRS could, depending on the facts, assert the maximum willful penalties for up to six years (depending on the FBAR statute of limitations still open). This is truly scary that an agent will tell his customer -- in the IRS metaphor -- that this could happen. Yet, although apparently telling this reader that whopping amount, the agent immediately said:
The agent then clearly stated, at least 3 times, that in more than a decade of the agent’s experience in international individual tax, the agent “had never seen anyone receive more than one year of FBAR penalties”. I repeat, the agent told me this at least 3 times.Based on my experience and the experiences other practitioners have shared with me, the agent was clearly giving her a good signal. Unfortunately, many agents do not give taxpayers -- their customers -- that signal.
At any rate, this reader's experience I hope will be helpful to other readers going through the process. And it appears the IRS personnel involved in her experience have learned something about how to run the program and I hope other IRS personnel who read her story will learn something. Hopefully, although it is fairly late in the processing of these various initiatives, they can improve the program to make it fairer.
Thanks to this reader for sharing her journey.