Taxpayer Advocate Service – 10 Most Serious Problems Encountered by Taxpayers Problem #8: International

Problem #8: INTERNATIONAL – The IRS’s Approach to International Information
Return Penalties Is Draconian and Inefficient

EXPLANATION OF THE PROBLEM
U.S. persons who receive money from abroad or who have certain foreign financial interests and
cross-border business activities are potentially subject to a wide range of U.S. reporting
requirements. Many of these requirements come with significant penalty exposure when a filing
is late, incomplete, or inaccurate. These international information return (IIR) penalties harm
sometimes unsuspecting lower-income taxpayers, small businesses, and immigrants. The
majority of these penalties are automatically assessed, broadly applied, needlessly harsh, and
often unexpected.

For more information on this problem, please see the Taxpayers Advocacy Web page
(www.TaxpayerAdvocate.irs.gov)

Next week Tuesday Tax Tip will continue the discussion on Problem #9
(www.TaxpayerAdvocate.irs.gov) (TTT 011425)