Do You Have Foreign Financial Activities? IRS Established International Information Reporting Services

If you have financial activity from foreign sources and violate tax laws, rules, and regulations, you may be susceptible to an International Information Reporting Penalty.

Depending on the return you file, the IRS calculates international information return penalties differently. Until you submit a complete and accurate return or pay the maximum penalty amount, continuation penalties may be applicable and increase.

According to an article published by IRS, if you conduct business outside of the United States, have financial assets abroad, own stock in a foreign company, or receive income from foreign sources, you might be required to file specific information return forms.

The type of penalty and the amount of the penalty determine when we start to charge interest. Until you pay your balance in full, which can be done online or by mail with a check, interest increases the amount you owe. If you are unable to pay your penalty in full by the deadline, pay what you can now and apply for a payment plan. When you create a payment plan, you might be able to lower future fines and interest.

If you can demonstrate reasonable cause and that you acted in good faith, they might be able to eliminate or reduce some penalties. If you behaved responsibly both before and after the failure and have compelling reasons, or if the failure was the result of events that were beyond your control, you may have reasonable cause.

When international information returns are submitted on time, payee statements are given, and the returns and statements are prepared with accurate information, penalties are avoided.