Letter 4596: Form 8300 intentional disregard penalty proposed: 30-day letter with pre-assessment Appeals

What Letter 4596 is

The 30-day letter proposing intentional-disregard penalties, sent with Form 14141 (IRM 4.26.11.7.1.1 table, Feb. 6, 2026; 4.26.11.11.3.3, Aug. 4, 2021). The amount is the greater of $25,000 per return or the cash received in the transaction up to $100,000, with no annual cap (IRM 4.26.10.10.1(9), Mar. 23, 2020); for statements, the greater of $500 each or 10 percent of the aggregate amount (IRM 4.26.10.10.2). This is the one Form 8300 penalty with pre-assessment appeal rights, and an Area Counsel opinion is required on the unagreed case (IRM 4.26.11.12.2, Aug. 4, 2021).

The deadline

30 days: small case request if $25,000 or less (Form 12203 acceptable), formal written protest in duplicate above that (IRM 4.26.11.11.3.3).

What to do

Use the pre-assessment protest; a Letter 4595 case does not get one. The manual allows partial pay-and-appeal (IRM 4.26.11.11.3.3). Expect the examiner's rebuttal within 7 days of the protest and closure to Appeals within 20 days (IRM 4.26.11.12.2); an inadequate protest draws Letter 1025, a transfer to Appeals Letter 2280 (IRM 4.26.11.12.3). Knowledge evidence the examiner relies on includes the date of the first Form 8300 you ever filed (IRM 4.26.11.10.10).

What intentional disregard means for Form 8300

Intentional disregard is the finding that a business knew of the Form 8300 requirement and chose not to comply, as opposed to failing through ignorance or error. The penalty is severe and uncapped: for each unfiled or false form, the greater of $25,000 (inflation-adjusted) or the amount of cash received in the transaction up to $100,000, with no annual maximum; for each missing customer statement, the greater of $500 or 10 percent of the aggregate amount that should have been reported. The examiner has to build a knowledge case to propose it, and the evidence is usually documentary: the business filed Forms 8300 in earlier years and then stopped, it received the customer statement from its own bank, it structured transactions just under $10,000, or its staff were told by a customer that they did not want a form filed and complied. Because the stakes and the finding are both greater, this is the one Form 8300 penalty with a right to appeal before assessment, and an unagreed case must be reviewed by IRS Area Counsel before it goes to Appeals.

Filing the protest

Use the pre-assessment appeal. A Letter 4595 case does not have one, and the same facts argued after assessment are argued from a weaker position. For a total of $25,000 or less, a small case request on Form 12203 is enough; above that, a formal written protest in duplicate stating each proposed penalty you disagree with, the facts, and the law, signed under penalties of perjury. The protest's job is to attack the knowledge finding: show what the business actually knew and when, who was responsible for cash reporting, what procedures existed, and why the failures were negligence rather than choice. The examiner has seven days to write a rebuttal and the case goes to Appeals within about three weeks; an inadequate protest draws a letter asking you to fix it, and partial payment with an appeal on the rest is allowed. Appeals can also consider the ordinary penalty as a fallback if intentional disregard is not sustained, so the protest should address both. The Appeals guide covers how a penalty case runs there, and the penalty calculator shows the ordinary-tier figure that becomes the fallback.

Questions about Letter 4596

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