Does this apply to FBAR penalties (FinCEN Form 114)?

No. FBAR is administered by FinCEN under Title 31 (Bank Secrecy Act), not the IRS under Title 26. §7508A(d) deadline suspension — the basis for Kwong — applies only to IRS deadlines, not FinCEN deadlines.

How does the Farhy v. Commissioner ruling affect §6038(b) refund claims?

Farhy challenged the IRS's authority to assess §6038(b) penalties without a separate Tax Court proceeding. That's a substantive defense. Kwong is procedural. They can be raised together — and an §6038(b) assessment may be challengeable on both grounds.

Should we be filing Form 843 or pursuing this through Tax Court?

Form 843 is the standard refund/abatement claim path. Tax Court venue depends on whether the IRS issued a notice of deficiency — most international information return penalties are assessable penalties (no deficiency notice required) and Form 843 is the appropriate venue. Substantive tax counsel should make the venue call.

International Information Return Penalties COVID Refund

TL;DR

International information return penalties — on Form 5471 (IRC § 6038), Form 5472 (§ 6038A), Form 8938 (§ 6038D), and related forms — carry $10,000-per-form-per-year minimums that can escalate to $50,000+ with continuing failure. Where the 23C assessment date falls inside the COVID-19 disaster window (broadly January 20, 2020 through July 10, 2023), the November 2025 ruling in Kwong v. United States may make these assessments refundable. FBAR penalties (FinCEN 114) are separate and not typically combined. We handle this on a no-win, no-fee basis.

What international information return penalties are

Several IRC sections impose substantial penalties on U.S. persons who fail to file international information returns. The most common:

IRC § 6038 — Form 5471 (foreign corporation information return). $10,000 per form per year, increasing by $10,000 per 30-day period of continued failure after IRS notice, capped at $50,000.
IRC § 6038A — Form 5472 (foreign-owned U.S. corporation). $25,000 per form per year, with continuation penalties.
IRC § 6038D — Form 8938 (specified foreign financial assets). $10,000 per form, with continuation penalties to $50,000.
IRC § 6679 — Forms 5471 and 8865 reporting penalties for certain returns.

FBAR (FinCEN 114) is a Bank Secrecy Act report enforced by FinCEN, not the IRS. FBAR penalties have a separate statutory regime and are not addressed under the same Kwong analysis on a single Form 843.

On the IRS account transcript, international information return penalties typically post as TC 240 with an explanation indicating the international subtype. Continuation penalties post as additional TC 240 entries with later 23C dates as the IRS escalates.

How international information return penalties are calculated

The base penalty is statutory and per-form-per-year (e.g., $10,000 for Form 5471 under § 6038). After the IRS issues a notice and the taxpayer fails to file within 90 days, continuation penalties accrue at $10,000 per 30-day period (§ 6038(b)(2)) up to a $50,000 cap. A taxpayer who failed to file Form 5471 for tax years 2019, 2020, and 2021 may face $30,000 in base penalties plus additional continuation penalties depending on the IRS notice and response timeline.

Worked numbers: a U.S. shareholder of a foreign corporation who missed the 2020 Form 5471 filing during pandemic disruption was assessed a $10,000 base penalty under § 6038. If the IRS issued a follow-up notice and the form was filed 90+ days later, an additional $10,000 to $40,000 in continuation penalties may accrue.

Why Kwong v. United States may unlock a refund

IRC § 7508A(d) provides a mandatory extension for filing deadlines for taxpayers in a federally declared disaster area. International information returns are filing-deadline-driven the same way 1040 returns are: § 6038, § 6038A, and § 6038D each attach to a missed filing deadline. Under the Kwong reading, those filing deadlines were suspended across the COVID-19 disaster period, and assessments imposed during the suspended period may have been imposed without statutory authority.

International information return penalties are particularly high-leverage Kwong candidates because the per-form amounts are large, continuation penalties accrue monthly, and Notice 2022-36 (which provided automatic abatement for many domestic late-filing penalties) generally did not cover international information returns — meaning these assessments are commonly still in place. The Kwong ruling is being appealed; eligibility is not guaranteed. A protective Form 843 preserves the claim.

Finding international information return penalties on your IRS account transcript

Pull your IRS account transcript (see our transcript guide). For these penalties, look for:

TC 240 — miscellaneous penalty assessment, with the explanation column indicating the international subtype (Form 5471, 5472, 8938, 8865).
TC 241 — abatement of TC 240.
The 23C date on each TC 240 entry — the legal assessment date.
Multiple TC 240 entries — continuation penalties post as separate entries with later 23C dates.
TC 670 — payment.

Worked example: a missed 2020 Form 5471

Consider a U.S. shareholder of a foreign corporation who missed the 2020 Form 5471 filing during pandemic disruption. The IRS account transcript shows a TC 240 of $10,000 with a 23C date of November 14, 2022, plus two continuation TC 240 entries of $10,000 each with 23C dates of February 13, 2023 and May 15, 2023, for a total $30,000 assessment. The taxpayer paid the full $30,000 in June 2023.

All three 23C dates sit inside the COVID-19 disaster window. The 2-year-from-payment window measured from June 2023 closes around June 2025, and the § 7508A(d) suspension under Kwong may extend further. A protective Form 843 referencing IRC § 7508A(d), IRC § 6038, Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), and each TC 240 entry preserves a $30,000 refund claim.

Common scenarios where international penalties may be refundable

Single missed form, single base assessment

The simplest case: one missed form, one $10,000 (or $25,000 for Form 5472) base assessment. The protective Form 843 lists the TC 240 entry, the underlying form and tax year, the 23C date, and the IRC section.

Continuation penalties stacked across notice periods

Where the IRS issued a notice and continuation penalties accrued, each TC 240 entry has its own 23C date. Each entry inside the disaster window is a separate Kwong candidate and should be listed separately on the Form 843.

Multiple forms across multiple years

A U.S. shareholder with multiple foreign corporations, or with both Form 5471 and Form 8938 obligations across multiple years, may have stacked assessments totaling $50,000-$200,000+. The protective claim should list each form, each year, and each assessment separately to maximize the refund position.

Filing deadline for international information return refund claims

IRC § 6511 governs these claims the same way as domestic penalty claims: 3 years from filing or 2 years from payment, whichever is later. The § 7508A(d) extension under the Kwong reading may further lengthen the window. Because international assessments are often paid in lump sums, the 2-year-from-payment window is often the relevant deadline. Confirm against your transcript.

How PenaltyBack handles international information return claims

We pull your IRS account transcript, identify each TC 240 entry tied to international information return penalties, segregate base and continuation assessments inside the disaster window, and draft a Form 843 protective claim citing IRC § 7508A(d), the relevant penalty section (§ 6038, § 6038A, § 6038D, or § 6679), Kwong v. United States, 179 Fed. Cl. 382 (Nov. 2025), and the specific 23C dates. We file under our authorized representative status. Our work is no-win, no-fee. The Kwong appeal is pending; the protective claim preserves your right regardless.

Frequently asked questions about international information return refunds

Does Kwong apply to Form 5471 penalties the same way it applies to Form 1040?

The Kwong reasoning turns on § 7508A(d) suspension of filing and payment deadlines, which on its face applies to international information return deadlines as well. The argument is structurally the same.

My $10,000 Form 8938 penalty was for tax year 2020. Is it eligible?

If the 23C date sits inside the COVID-19 disaster window (broadly January 20, 2020 through July 10, 2023), yes — the protective claim is the same in structure as for a Form 5471 penalty.

Are FBAR penalties (FinCEN 114) covered the same way as IRS information return penalties?

No. FBAR is a Bank Secrecy Act filing enforced by FinCEN, with its own statutory regime. The IRS § 7508A(d) hook in Kwong does not directly cover FBAR, and FBAR claims should be analyzed separately.

What if I received multiple $10,000 penalties across multiple years?

Each penalty is a separate TC 240 entry with its own 23C date. Each in-window entry is a separate Kwong candidate. The protective Form 843 should list each separately to maximize the refund position.

I requested first-time abatement and was denied. Can I still file under Kwong?

Yes. First-time abatement is generally not available for international information return penalties under § 6038 / § 6038A / § 6038D in any case. The Kwong-based protective claim is independent of and not foreclosed by an FTA denial.

Kwong v. United States, explained. Failure-to-file vs failure-to-pay. How to read your transcript. Form 843 protective claim wording. The IRS may owe you money from COVID.