Understanding a CP3219A Notice from IRS, What Comes Next?

IRS CP3219A Notice 

While there are many different types of notices that a taxpayer may receive from the Internal Revenue Service, one of the most important notices the taxpayer may receive is a CP3219A Notice. The reason why this notice is so important is because it is the IRS’s way of telling the taxpayer that the information that they have does not match the information that the taxpayer submitted – and the matter has reached the endgame. If a taxpayer receives a 3219A notice, they are under a time crunch to resolve the matter (and file a U.S. Tax Court Petition) — so let’s take a brief look at what a Taxpayer can do if they receive such a notice.

What is a CP3219A Notice?

When a taxpayer receives a 3219A Notice, this is not the first letter involving the matter that they will have received on the matter. Typically, they will have received multiple notices before receiving CP3219A, such as the CP2000. It is not uncommon for taxpayers who receive the CP2000 to do nothing about it hoping it just goes away. Unfortunately, this is rarely the case and oftentimes it will lead to additional letters from the Internal Revenue Service, possibly culminating with the CP3219A Notice.

Does the Taxpayer Disagree with the IRS?

If the taxpayer does not agree with the CP3219A notice, it is very important for them not to sign the 5564 Notice a Deficiency Waiver that is included with the notice. By signing this waiver, the taxpayer will lose the right to take the matter to the Tax Court. That is because if the taxpayer disagrees with the Internal Revenue Service’s decision, they can pursue the matter in Tax Court. One of the benefits of pursuing the matter in Tax Court is that there is no requirement to pay the amount due first. In addition, oftentimes the Tax Court may send it back to appeals or a different department for further conference to resolve the matter (read: for those of you who received notices prior but did nothing about it this may be your last opportunity to try to get back on track and challenge the IRS on the matter).

As provided by the IRS:

What this notice is about

We received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax. The notice explains how the amount was calculated, what to do if you agree or disagree, and how you can challenge it in U.S. Tax Court, if you choose to do so.

What you must do

• • • Read the notice carefully. It explains the proposed increase or decrease in your tax. Note: The amounts shown as due on the enclosed Form 5564, Notice of Deficiency – Waiver, may not match your previous notice amount due because you can’t challenge all items in U.S. Tax Court.

    • Respond to the notice. Complete and return the response form and state whether you agree or disagree with the notice. You can submit your response by:

      • Mail using the return address on the enclosed envelope, or
      • Fax your documents to the fax number in the notice using either a fax machine or an online fax service. Protect yourself when sending digital data by understanding the fax service’s privacy and security policies.

    • If you agree with the changes, follow the instructions to sign the enclosed Form 5564 and return it to us. We require both spouses’ signatures if you filed married filing jointly.

    • If you disagree or have additional information: for us to consider, mail or fax the information with the enclosed Form 5564 to the address or fax number on the notice. We will work with you to resolve your issues during the 90-day response period.

      • For us to consider additional information, mail or fax the information with the enclosed Form 5564 to the address or fax number on the notice. We will work with you to resolve your issues during the 90-day response period.
      • If the income in question was later deemed nontaxable due to a state relief payment, financial assistance allocated under the Infrastructure Investment and Jobs Acts, or similar language,  provide a signed statement with the response form.

    • If you don’t agree, you have the right to challenge the proposed changes by filing a petition with the U.S. Tax Court no later than the date shown on the notice. Again, we will work with you to resolve your issues during the 90-day period, but this won’t extend the time you have to file a petition in Tax Court if you choose to do so. Please note the court can’t consider your case if you file the petition late.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms or filed inaccurately (which may led to a 3219A Notice), the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

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

Contact our firm today for assistance.