LAW AND ANALYSIS
CASE DEVELOPMENT, HAZARDS AND OTHER CONSIDERATIONS
1 Prior to 2010, the initial penalty was 35% of the gross reportable amount.
2 A U.S. person treated as the owner of a foreign trust who fails to file Form 3520 when required under section 6048(b) will be subject to a penalty for such failure only with respect to tax years beginning after March 18, 2010.
3 Prior to 2010, the initial penalty was 5% of the gross reportable amount for failure to file Form 3520 -A.
4 One section of the Code explicitly defines a “divisible tax” as any tax imposed by subtitle C (employ ment taxes) and the penalty imposed by section 6672 with respect to such taxes. I.R.C. § 6331(i)(2). This definition only applies, however, in a situation in which the Service levies with respect to an unpaid divisible tax during the pendency of a court proceeding challenging that tax. Moreover, this definition lacks any reference to excise taxes. See Nakano v. United States, 2009 U.S. Dist. LEXIS 130862 (D. Ariz. 2009) (noting and holding that an excise tax is not a divisible tax within the meaning of section 6331(i)(2)). Because it fails to encompass excise taxes, which the Supreme Court has specifically