IRS Letter 6185 & 6291 for Foreign Accounts

IRS Letter 6185 & 6291

What is an IRS Letter 6185 or 6291 for Foreign Accounts: When it comes to the IRS, there are many different types of letters and notices the Internal Revenue Service issues to Taxpayers. Sometimes, the notice is an Audit or Examination Notice. Other times, the IRS Notice is a penalty notice, such as a CP15 Notice. More recently (and especially with the introduction of FATCA aka Foreign Account Tax Compliance Act), Taxpayers receive letters, such as IRS Letter 6185 or 6291. The IRS Letter 6185  & 6291 are soft letters. With a Soft Letter, the Taxpayer is not actually under audit or examination. Rather, the IRS has information on file which differs from information the Taxpayer may have provided (such as how account information may have been reported on Form 8938). Lets’ review the basics of IRS Letter 6185 and 6291.

Content of IRS Letter 6185 and 6291

While the specific content of each IRS letter 6185 and 6291 will differ based on the specific noncompliance, the letter will typically provide the following:

Why We’re Contacting You

• • • • “Our records for the tax years above show you did not properly report the foreign financial accounts on form 8938 statement of specified foreign financial assets you held with [Bank Name].”

What You Need to Know

• • • These foreign financial accounts meet the reporting threshold under the foreign account tax compliance act  (FATCA). you must file form 8938 to report information on your foreign financial accounts because you are specified person with an interest in reportable financial accounts.

      • Generally, US taxpayers must report income from all sources worldwide, including income from foreign entities, and foreign financial assets and accounts. in addition to form 8938, you may also need to follow one or more of the following returns or reports:

        • FBAR (FinCEN Form 114) – Foreign Bank and Financial Account

        • Form 3520 – Foreign Gift & Trust

        • Form 3520-A – Foreign Trust

        • Form 5471 – Foreign Corporation

        • Form 8865 – Foreign Partnership

        • Form 926 – Foreign Transfers

        • Form 8621 – Passive Foreign Investment Company 

        • Form 8858 – Disregarding and Elections

What You Need to Do

• • • Please review your information relevant to Form 8938 and the above returns, forms, and reports to ensure all required United States filings are current, complete, and correct. You should take all necessary actions to remedy any non-compliance with your reporting of foreign income and entities, and foreign financial assets and accounts.

    • We offer the following options for taxpayers with foreign financial assets to address previous failures to comply with U.S. tax and information return obligations:

Make a Voluntary Disclosure in Response 

• By voluntarily correcting returns or filing delinquent returns before being placed under audit, most taxpayers will avoid criminal prosecution, although, based on facts and circumstances, this isn’t guaranteed. You can find information on how to make a voluntary disclosure at irs.gov/vdp.

Use Streamlined Filing Compliance Procedures 

• We offer the streamlined filing compliance procedures to taxpayers who want to certify that their failure to fully report foreign income and assets, and to pay all associated tax due, was not because of willful conduct on their part. You can find information on streamlined filing compliance at irs.gov/streamlined.

File Delinquent or Amended Returns

• If you fall outside the Voluntary Disclosure Practice, ·or Streamlined Filing Compliance Procedures, you can correct past mistakes by filing past due or amended tax returns. Please see the following  links  for more information.

If you failed to file one or more income tax returns, file the delinquent returns as soon as possible. For more information, see www.irs.gov/filing.

If you made a mistake on your income tax return, you can file an amended return

More Information for IRS Letters 6185 & 6291

• Find tax forms or publications by visiting our website at irs.gov/forms-pubs or calling 800-TAX-FORM (800-829-3676). Find information about the reporting of foreign income, foreign entities, foreign financial assets, and foreign financial accounts at www.irs.gov or www.FinCEN.gov.

Responding to an IRS Letter 6185 or 6291 is Time-Sensitive

In conclusion, while receiving a soft letter such as a letter 6185 or 6291 from the IRS can be unsettling, it is not a notice of examination or audit. rather, it is designed to put the taxpayer on notice that the IRS has information which differs from the information the taxpayer may have already reported to the IRS — and it gives the taxpayer an opportunity to get into compliance.

About Our International Tax Law Firm

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

Contact our firm today for assistance.