Department of Justice Sues Taxpayer to Collect $3.5 Million in FBAR Penalties, Possibly Putting Dutch Bank ABN AMRO's Swiss Operations on IRS's Enforcement Radar

more+
less-

Carl R. Zwerner of Miami, Florida, is facing nearly $3.5 million in civil penalties for failing to report a Swiss bank account, according to a lawsuit filed by the Justice Department (United States v. Zwerner, S.D. Fla., No. 1:13-cv-22082).

The lawsuit, filed on June 11, alleges that Zwerner failed to file Form TD F. 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for an account at Dutch bank ABN AMRO’s Swiss operation from 2004 to 2007. Judging by the complaint, Zwerner appears to have put himself in the IRS’s cross hairs by doing a “quiet disclosure” of his account. In other words, he simply filed his delinquent FBARs and amended tax returns without entering the IRS’s voluntary disclosure program. Interestingly, he filed the first of the delinquent FBARs “on or about October 13, 2008,” which was before the IRS created the 2009 Offshore Voluntary Disclosure Program.

Zwerner bolstered the IRS’s argument that his failure to file was willful by holding the account in nominee names, including the Bond Foundation and the Livella Foundation.

The IRS appears to have asserted the 50% willful FBAR penalty against Zwerner for each year, resulting in a penalty that greatly exceeds the balance of the unreported account. It appears from the complaint that the highest balance in the account was $1.7 million. In contrast, the IRS asserted FBAR penalties of  $3,488,609.33, which the Department of Justice now seeks to reduce to judgment.

The action comes less than three weeks before a June 30 deadline for employees and officers to report signature authority over certain foreign financial accounts on the FBAR.

 

Written by:

Published In:

DOJ
IRS
Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×