An FBAR penalty letter needs a response that fits its procedural stage. A proposed penalty, an assessed penalty and a request to extend assessment time are different events. Before preparing an explanation of your foreign accounts, identify the letter, the reporting years, the stated deadline and any earlier Appeals conference.
Identify what the IRS has sent
Letter 3709 concerns proposed FBAR penalties. Letter 3708 concerns an assessed penalty and payment demand. Form 15616 is a consent to extend the assessment period; it is not itself an appeal or a penalty waiver. IRS Publication 5970 explains these distinctions and the relationship between remaining assessment time and Appeals review.
Under that publication, a Letter 3709 protest must satisfy the letter’s requirements and reach the IRS by its stated due date. Preassessment Appeals consideration generally requires at least 365 days remaining on the assessment period when Appeals receives the case. If a penalty is assessed and you have not previously requested an Appeals conference, Publication 5970 describes a written protest received within 30 days of Letter 3708. Read your actual correspondence with counsel rather than assuming a generic timeline controls every communication.
Build a notice and evidence file
The most useful first step is a chronology, not a broad statement that the penalty is unfair. Preserve the complete letter and enclosures, envelope, prior requests, responses, account statements, original FBAR acknowledgments and any amended filings. Keep contemporaneous documents separate from explanations created after the examination began.
| Record | Question it helps resolve |
|---|---|
| Notice and enclosures | Which years, accounts, amounts and response instructions are actually disputed? |
| Account statements and ownership records | What balances, ownership rights and signature authority existed? |
| Filed reports and acknowledgments | What information was reported, and when? |
| Prior examiner correspondence | What was requested, answered or still unresolved? |
| Advice and preparation records | What was communicated about the reporting obligation at the time? |
For each disputed year, list the IRS position, your factual disagreement and the document supporting that disagreement. Mark missing records honestly. Do not replace missing statements with guessed balances or backdated explanations. A filing-history discrepancy and a disagreement over the penalty theory may require different responses.
Review Form 15616 separately
A signed fixed-date consent changes the time available for assessment and related administrative steps. It can affect the opportunity for preassessment review, but also extends the government’s assessment window. Before deciding, ask counsel to examine the identified periods, proposed expiration date, outstanding factual work and available procedural options. There is no universal instruction to sign every consent or refuse every extension.
Keep the procedural track clear
Maintain a log showing the recipient, transmission method, date sent and proof of receipt for each submission. A telephone conversation is useful for clarification, but should not substitute for a required written protest. Preserve the exact version submitted and its attachments so later reviewers can reconstruct the record.
FBAR examination is distinct from ordinary income-tax reporting. Correcting a report does not automatically resolve a penalty examination, and an income-tax amendment does not itself amend an FBAR. If omitted income, multiple unfiled years or a potential willfulness issue emerges, counsel should evaluate the broader facts before treating the matter as a simple balance correction.
For related background, see our FBAR filing guide and FBAR attorney representation. A consultation can focus on the notice, evidence gaps and procedural choices; outcomes depend on the actual record.
Primary source
IRS Publication 5970: Extending the FBAR Penalty Assessment Period. Source checked October 1, 2026. This article provides general information, not advice for a particular examination.
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Samuel Landis, Esq.
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Sam Landis is a Beverly Hills IRS tax attorney specializing in IRS collection defense, audit representation, and international tax compliance for foreign nationals and US expats.