Earlier this month, on the 11th of August, 2023, the Internal Revenue Service (IRS) announced a significant update that could benefit many international taxpayers. Under the right circumstances, these taxpayers will now have the option to use a new, entirely electronic tool to submit IRS penalty abatement requests for certain late-filed forms.
To facilitate this process, the IRS has made available a dedicated fax number (855-582-4842). However, for the time being, this fax option only applies to three specific submission types: gain recognition agreements, dual consolidated losses and deferral of gain contributions from corporations.
This is a considerable move forward for the IRS in the digital sphere. The adoption of a wholly electronic tool not only simplifies the process of submitting these tax forms but also makes the IRS’s workflow more efficient. While only a limited number of form types are included in this new approach, the program’s potential expansion to include further tax forms could significantly streamline procedures for international taxpayers.
The new fax option stands to disentangle some of the complexities that regularly confront international taxpayers dealing with penalty abatement requests. However, it’s also crucial for these taxpayers to understand that the newly implemented system does not denote an automatic approval process. Notwithstanding the adoption of this new modality, the IRS will continue to exercise due discretion in approving or rejecting submitted penalty abatement requests.
More details about this update can be found on JDSupra, under the publication authored by Foodman CPAs & Advisors.