A recent federal case demonstrates the perils of FBAR litigation and the harsh penalties that apply for a willful failure to file an FBAR (FinCEN Form 114) to report a foreign account. The case involved an IRS civil FBAR penalty assessment of $988,245 for an unreported Canadian financial account. The defendant/taxpayer checked “no” on Schedule B of his federal tax returns …
A former U.S. resident became the first U.S. taxpayer to plead guilty to criminal tax charges arising out of the Panama Papers data leak. The Indictment charged Harald Joachim von der Goltz and three others, including a U.S. tax professional, with conspiracy to commit tax evasion, wire fraud, money laundering, and willful failure to file an FBAR, as well as …
Taxpayers with interests in foreign financial assets, financial accounts, and/or foreign trusts may have certain tax reporting obligations with the IRS. For example, taxpayers with a financial interest in or signature authority over foreign financial accounts with an aggregate value of over $10,000 at any time during the calendar year must file a Report of Foreign Bank and Financial Account …
A recent decision of the United States Court of Appeals, Federal Circuit holds that the pre-2004 regulation limiting willful FBAR penalties to a maximum of $100,000 is notapplicable. As many tax practitioners know, 31 U.S.C. § 5314(a) requires taxpayers who have accounts with foreign financial institutions, specifically any person with a financial interest in or signature authority over foreign financial …
A recent FBAR case held that non-willful failures to report foreign bank accounts can give rise to a $10,000 penalty per account—per year. In United States v. Boyd, a federal district court upheld the IRS’s assessment of multiple penalties for non-willful failures to file a FBAR. A $10,000 penalty per account creates substantial exposure for taxpayers with multiple unreported accounts. …
The Third Circuit Court of Appeals recently issued its much-anticipated decision in Bedrosian v. United States. The opinion reviewed a lower court’s decision refusing to apply the willful FBAR penalty. See our prior post on the case here. The appellate court’s decision ultimately remanded the case back to the lower court for further analysis. The FBAR Reporting Requirement: Congress …
The IRS recently succeeded in imposing a hefty penalty against a US taxpayer for failing to report a foreign bank account in the case of Norman v. United States, 183 Fed. Cl. 189 (2018). That penalty was equal to 50 percent of the balance of the taxpayer’s unreported foreign account at the time of the failure. As a brief background, …
Yet another federal court has determined that the government-friendly, preponderance-of-the-evidence standard—rather than the higher, clear-and-convincing-evidence standard—applies in civil “willful” FBAR penalty cases. The district court’s decision in United States v. Garrity, No. 3:15-cv-00243 (D. Conn. April 3, 2018) comes on the heels of a taxpayer victory in Colliet on different grounds. See our prior blog for comments on Colliot: The Colliot …
A recent federal court decision may stand existing FBAR litigation on its head. The Colliot decision—issued out of the District Court for the Western District of Texas—offers a new take on “willful” FBAR penalties. And the government doesn’t like it. The defendant, Colliot, argued that the IRS acted “arbitrary and capriciously” in assessing penalties against him that exceeded those allowed under …
The Paradise Papers represent the latest large-scale leak of financial documents believed to link thousands of companies and individuals to hidden offshore accounts and secret tax havens. The leak was massive, totaling some 1,400GB of data—that translates to an estimated 13.4 million documents covering a period from 1950 to 2016.[i]Nearly half of the leaked documents come from corporate registries in …
