What This Letter Means

Letter 3709, FBAR 30 Day Letter, comes at the end of an IRS examination of your Report of Foreign Bank and Financial Accounts, FinCEN Form 114. The examiner found one or more violations and is proposing civil penalties.

The package includes:

  • A written summary explaining the violations, the proposed penalties, and how they were calculated.
  • Form 13449, an agreement to assessment and collection of the penalties.
  • Notice 1330, about paying by check.

Your Options

  • Agree. Sign Form 13449 and send it in, usually with payment.
  • Protest. Send a written protest to the examiner, postmarked on or before the response date in the letter. It must contain everything the letter lists. The group manager can grant reasonable extensions.
  • Fast Track Settlement. It may be available if you ask before the exam group releases the case and the penalty has not been assessed.

How FBAR Appeals Work

FBAR penalties fall under Title 31, not the regular deficiency process. There is no Tax Court petition route before assessment. You get one appeal, either before or after assessment. You don't have to pay to appeal.

A pre-assessment appeal requires at least 365 days left on the FBAR assessment statute when Appeals gets the case. The IRS may ask you to extend that statute. If too little time remains, the penalty is assessed first and you appeal after you receive Letter 3708, the notice and demand for payment. Once a penalty over $100,000 is assessed, Appeals cannot settle it without Department of Justice approval.

If You Don't Respond

The penalty is assessed and collection begins.

Deadlines

Use the response date printed in the letter. It is usually 30 days, but it can be shorter when the statute is close to expiring.

If the IRS is proposing FBAR penalties against you, call us at (813) 229-7100. FBAR cases need a tax attorney before the response date.