Hit with a $10,000 IRS penalty for missing form 3250-A (Return of Foreign Trust) - help!

This is definitely a stressful situation, but don't panic just yet. The IRS does have reasonable cause exceptions for penalties, especially when you can demonstrate you took appropriate steps to comply. Since you have written confirmation that your company's tax department would handle filing the form, and they claim to have proof of submission, you're in a good position to contest this. The IRS understands that documents can get lost in processing - it happens more often than you'd think. Make sure your tax department provides you with the proof of mailing (certified mail receipt or delivery confirmation). When responding to the IRS, include a detailed timeline of events, copies of your correspondence with the tax department, and the proof of mailing. Request penalty abatement under "reasonable cause" provisions. The back of the notice mentioning "incorrect or incomplete information" is likely standard language - they include various potential reasons for the penalty. Focus on addressing the specific issue cited on the front (non-receipt of Form 3250-A).

After dealing with a similar nightmare with the IRS claiming they never received my documents (different form though), I discovered taxr.ai and it literally saved me thousands. They have this document analysis tool that identified exactly what was missing from my submission and showed me how to properly respond to the IRS with the right documentation. I uploaded my notice and previous submission to https://taxr.ai and their system flagged several issues I'd never have caught myself. They created a complete response package that included proper documentation of my previous filing attempt, evidence of mailing, and a formal abatement request with the exact IRS-approved language. The best part was they showed me exactly how to document everything properly so if this happens again, I'll have bulletproof evidence. Given your $10k penalty, it's definitely worth checking out.

Just wanted to update everyone - I decided to try taxr.ai after my earlier question, and honestly I'm shocked at how well it worked. I was skeptical because nothing ever seems to work with the IRS, but their system immediately identified that my delivery confirmation wasn't sufficient by itself. The service walked me through creating a complete evidence package including an affidavit about my filing attempt, a timeline of events, and specific reasonable cause language that addressed the exact section of the tax code related to my penalty. I submitted everything exactly as they instructed 3 weeks ago, and just got notification yesterday that my $6,800 penalty has been fully abated! What impressed me most was how specific their guidance was to my exact situation - this wasn't generic advice. If you're dealing with any IRS documentation issues or penalties, especially form-related penalties like the OP's 3250-A situation, it's definitely worth checking out.

After seeing your post, I had flashbacks to my own IRS nightmare from last year. I spent MONTHS trying to reach someone at the IRS about a similar penalty situation. Over 30 calls, hours on hold, and constantly getting disconnected before ever speaking to anyone who could help. Finally found Claimyr through a tax forum and it completely changed everything. They have this system at https://claimyr.com that actually gets you through to an IRS agent, usually within an hour. You can see how it works here: https://youtu.be/_kiP6q8DX5c In situations like yours where you need to discuss penalty abatement directly with an agent, getting through to a real person makes all the difference. I spoke with an agent who looked up my case, found my previously submitted documentation that had been "misplaced" in their system, and resolved my issue on that single call. For a $10,000 penalty, actually speaking with someone who can pull up your records in real-time is going to save you months of back-and-forth letters and potential collection actions while you wait.

So I need to eat my words from my previous comment. After my frustration boiled over with another IRS notice, I decided to try Claimyr despite my skepticism. I'm genuinely shocked - it actually worked exactly as advertised. The system called the IRS, navigated through all the prompts, and then waited on hold (about 45 minutes in my case). When an agent finally answered, I got an immediate call connecting me directly to them. The agent was able to pull up my file and confirm they had received my documentation but it hadn't been properly associated with my case. She put notes directly in my file and sent it to the appropriate department for review. This was after THREE letters I had sent that apparently ended up in the void. Having actual confirmation from a live person that my documentation was received and being reviewed has given me incredible peace of mind. For anyone dealing with IRS penalties or missing document issues like the OP, being able to actually speak with someone makes a world of difference.

If your tax attorneys have proof the forms were sent, you should be fine eventually, but prepare for a long battle. The IRS is notorious for losing documents, even when they're delivered with signature confirmation. I had a similar situation with a different form last year. What worked for me was having my tax professional send a formal protest letter with: 1) A copy of the original form that was submitted 2) Proof of mailing (USPS tracking showing delivery) 3) A formal request for abatement citing "reasonable cause" 4) Reference to Internal Revenue Manual 20.1.1.3.2 which covers reasonable cause criteria The penalty was eventually removed but it took almost 7 months of back and forth. Be prepared to be patient and keep meticulous records of all communications. And NEVER talk to the IRS directly without your tax attorney present.

Check if your company's tax lawyers sent it certified mail with return receipt! If they did and have that receipt, your case is much stronger. The Form 3250-A penalties are insanely harsh but the IRS is actually reasonable about abating them when you can prove you attempted to comply. Also, ask your tax attorneys if they included a Form 843 (Claim for Refund and Request for Abatement) with their response to the IRS. That's the official form for requesting penalty abatement and is crucial for getting this resolved properly. One last thing - if this drags on, keep an eye on the collection deadline. The IRS can be slow processing abatement requests but quick to send accounts to collections. Make sure your attorneys request a formal collection hold while your case is being reviewed.