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International Reporting Penalties

In FBAR, Fines, International Tax, Penalties, Uncategorized by Ryan DeanLeave a Comment

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 …

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Where Is the Limit on Penalties for Willful FBAR Violations?

In Bank Fraud, Evasion, FBAR, Fines, Fraud, International Tax, Uncategorized by Ryan DeanLeave a Comment

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 …

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Recent FBAR Case Allows Multiple Penalties for Single Failure to File FBAR

In FBAR, International Tax by Jason FreemanLeave a Comment

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. …

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The Willful FBAR Penalty: Bedrosian and New Insights

In FBAR, Penalties by Jason FreemanLeave a Comment

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 …

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The Colliot Decision: The Government Loses an FBAR Case that May Change International Reporting Penalties

In FBAR, International Tax by Jason FreemanLeave a Comment

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 …

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The Paradise Papers Continue to Shed Light on the Use of Offshore Tax Havens

In FATCA, FBAR, Offshore Tax, OVDP by Jason Freeman and Spencer BanksLeave a Comment

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 …

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IRS Required to Return FBAR “Penalty:” Penalty was “Illegally Exacted”

In Bank Secrecy Act, FBAR, White Collar, Willfulness by Jason FreemanLeave a Comment

The much-anticipated decision in Bedrosian v. United States was released on Wednesday of this week, and it did not fail to disappoint—unless, of course, you find yourself on the latter side of the “v” in the case caption.  The case presented a fundamental FBAR issue: was Bedrosian’s failure to report his foreign account “willful?”  If it was, he would have …

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How the FBAR’s “Willfulness” Element Has Recently Evolved

In FBAR, White Collar, Willfulness by freemanlawdevLeave a Comment

The FBAR (FinCEN Form 114) requires United States persons to report any foreign financial accounts in which the person has signatory authority or a financial interest if the total value of such accounts exceeds $10,000.[1] In 2004, the IRS obtained the ability to impose non-willful civil penalties against those persons that fail to report such foreign accounts. Prior to that, …