We had a client who was a non-US taxpayer living in Hong Kong who hadn’t paid US taxes related to stock option income from a US assignment dating back several years. He came to us as a referral from another client. The IRS had put a lien on his US bank account and seized $105,000 from his account for back taxes and penalties due.
We immediately filed the appropriate returns and contacted the IRS agent in charge of the case. Initially, we were able to get $35,500 back from the IRS, but were still out of pocket almost $30,000 in penalties and interest.
We drafted a letter to the IRS to send along with a request to abate Penalties arguing that the taxpayer did not realize he had an obligation to pay taxes and that his frequent moving did not allow for constructive receipt of the IRS’s letters.
The IRS accepted our appeal and granted the taxpayer a refund of $26,500 of assessed penalties and interest.