U.S. Government Concedes In Case Of Large Foreign Gifts

An American citizen got a big cash gift from his mom back in Poland. The U.S. government went after him for failure to report foreign gifts – but now has changed its tune regarding “reasonable cause” and “willful” failure to file.

The U.S. Department of Justice has conceded in Wrzesinski v US that an American citizen and a native of Poland does not owe penalties for failing to file IRS Form 3520, “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts,” after receiving $830,000 from his mother in Poland.

Krzysztof Wrzesinski immigrated to America in 2005 at age 19 and for the past nine years he has been a Philadelphia police officer. In 2010, his mother, Barbara Wrzesinska, a citizen and resident of Poland, made a gift to her son of $830,000 after winning the Polish lottery.

Wrzesinski visited his mother in mid-November 2010 and while there phoned his tax advisor in the United States to ask if he needed to document the gift in the U.S. The advisor, a tax accountant and an Enrolled Agent, told Wrzesinski there was no need to include the gift on his U.S. tax returns and that there was no other U.S. legal requirement in connection with the gift. Wrzesinski received the money in four payments from December 2010 to March 2011.

A Problem Unearthed
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