Reply to IRS penalty- Settle or proceed to litigation?

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[quote=Anonymous][quote=Anonymous]
OP here. Sorry I was silent for a bit... had to fix dinner, feed the family, clean the kitchen and pack lunches for tomorrow.

[b]Re: The amount of the gift was $137k.. which would have been a non-taxable event had I just filed it on time. Should have been simple. Sigh! [/b]

Re: [i]I remain concerned that your attorney told you that you had to pay the assessment before challenging in court (not true for Tax Court, but true for Court of Claims or for Federal District Court) and remain concerned that no one told you how the assessment was calculated.[/i]

I didn't jot it down in my notes but I seem to recall "court of claims" being mentioned. 
I was told how it was assessed: penalty is the greater of $10,000 or 35% of the gross value received. $36,825 is the penalty. The remainder is the interest.

I really appreciate the thoughts put in this thread.

I wanted to think about how I am perceived by the IRS and the Office of Appeals.
The Office of Appeals Officer really zeroed in on me during the discussion and asked me a bunch of questions, after my Tax Attorney said that I will not be speaking and that in fact, their clients don't usually even attend hearings.  I've been keeping my timeline/documentation because I've had to do so much of it between the letters written by the CPA and when I hired this Tax Attorney- but I didn't have any of my notes in front of me during the 15-minute teleconference. I got a really bad vibe after that call.

[/quote]

OP.  I hope you end up making the right choice.  Remember that the money already spent is sunk cost so don't factor that into your decision making process.

Can you expand on the gift?  Was it gift to you from family abroad or family here that owned assets abroad?  Asking because, we are about to get some money this year as gift from parents (in another country) and wondering if there are any gotchas.  We file our own taxes normally.  Thanks![/quote]

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