News & Analysis as of

Tax Penalties Reporting Requirements

Rivkin Radler LLP

Unconstitutionally Excessive FBAR Penalties? It Depends

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You may recall that earlier this year the IRS launched an initiative to pursue 125,000 “high-income, high-wealth” taxpayers who have not filed taxes since 2017. These were cases where the IRS received third party information...more

Holland & Knight LLP

Tax Court: As to Listed Transaction, IRS Must Adhere to APA

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In the late 1990s and early 2000s, the IRS was confronted with a proliferation of corporate transactions that it viewed as aggressive tax shelters. Relying on the authority Congress delegated through Section 6011(a), the IRS...more

Verrill

Safe Harbor Exception for De Minimis Dollar Amount Reporting Errors

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As part of the routine administration of employee benefit plans, shortly after the end of a calendar year, many transactions must be reported to the federal government (“information returns”) and participants (“payee...more

Lerch, Early & Brewer

Tenth Circuit Affirms Deficiencies, Penalties for Offshore Income

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Harrington v. Commissioner - In Harrington v. Commissioner of Internal Revenue, George S. Harrington (Harrington) challenged tax deficiencies and fraud penalties assessed for tax years 2005 through 2010. Originally...more

Cadwalader, Wickersham & Taft LLP

Supreme Court Hands Taxpayers a Victory in FBAR Penalty Case

Taxpayers recently won a significant victory at the Supreme Court in a penalty case involving a non-willful failure to file a Report of Foreign Bank and Financial Accounts (“FBAR”) under the Bank Secrecy Act (the “BSA”)....more

Polsinelli

Major Win For Taxpayers: SCOTUS Limits FBAR Penalties to Per Report Not Per Financial Account

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After years of litigation, the United States Supreme Court, in Bittner v. United States, 598 U.S. ____ (2023), determined that the penalty for a non-willful failure to file a Report of Foreign Bank and Financial Accounts...more

BakerHostetler

Supreme Court Rules in Favor of Taxpayer in FBAR Case Penalty for Non-Willful Violations Apply on a Per-Report Basis

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On Feb. 28, the U.S. Supreme Court ruled that non-willful penalties related to FBARs apply to each report filed, not on a per-account basis. The 5-4 decision resolved a split between the Fifth and Ninth circuits that focused...more

Trusaic

[Webinar] How HR Can Outsource ACA Compliance to Save Time and Reduce Penalty Risk - January 31st, 11:00 am - 11:45 am PST

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With the new year upon us, organizations must turn their attention to the annual ACA reporting requirements. As we head into the 8th filing season, complying with the healthcare law’s Employer Mandate looks nothing like it...more

Freeman Law

Section 6751(b) Penalty Approval Circuit Split

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Eleventh Circuit Sides with Ninth Circuit on Section 6751(b) Circuit Split - Introduction: Section 6751(b) and the Timing of Supervisory Approval of a Penalty - The Eleventh Circuit’s decision in Kroner v. Commissioner,...more

Goodwin

Late filing penalties issued for the non-fulfillment of the Luxembourg real estate levy reporting obligation

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​​​​​​​The Luxembourg Tax Authorities have started to issue late filing penalties for a fixed amount of EUR 10,000 for the non-fulfillment of the reporting obligation regarding real estate levy. In light of this action,...more

Holland & Knight LLP

Willful or Non-Willful? That Is the Question: IRS Rejects Non-Willful Certification

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In Flint v. United States, 2022 WL 3593826 (Fed. Cl. 2022), the court held that the executors of an estate could not recover a six-figure "Title 26 miscellaneous offshore penalty" (MOP) the decedent paid to the Internal...more

Gray Reed

Supreme Court Will Hear Non-Willful FBAR Penalty Dispute

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On June 21, 2022, the United States Supreme Court agreed to hear a dispute involving split decisions among the circuit courts on non-willful penalties. The Fifth Circuit parted ways with the taxpayer friendly decision of the...more

Gray Reed

Non-Willful FBAR Penalties Will be Much Higher in the Fifth Circuit

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On November 30, 2021, the Fifth Circuit parted ways with the taxpayer friendly decision of the Ninth Circuit that non-willful penalties are capped at $10,000 per FBAR filing instead of the $10,000 per unreported bank account...more

Freeman Law

Failure to Report Foreign Trust Results in 35% Penalty Against the Owner/Beneficiary

Freeman Law on

The 35% penalty under I.R.C. section 6677 for failing to report a distribution from a foreign trust applies against a person who is both the beneficiary and grantor/owner of a foreign trust. At least, that is now the rule...more

Womble Bond Dickinson

CIC Services, LLC v. Internal Revenue Service: Captive Insurance Wins a Battle, but the War Continues

Womble Bond Dickinson on

On Tax Day, May 17, 2021, in a unanimous opinion authored by Justice Kagan, the United States Supreme Court held that the Anti-Injunction Act ("AIA") does not bar a pre-enforcement challenge to the legality of an IRS-imposed...more

Kerr Russell

Challenge To IRS Notice Does Not Violate Anti-Injunction Act

Kerr Russell on

In a ruling with implications for retirement and tax planning generally, the U.S. Supreme Court has determined that, in certain circumstances, taxpayers can challenge reporting requirements before complying with the...more

Eversheds Sutherland (US) LLP

Warren bill fundamentally changes financial account reporting requirements and substantially increases IRS funding

On May 24, 2021, Sen. Warren introduced Senate Bill 1788, the “Restoring the IRS Act” (the Proposed Legislation). The Proposed Legislation generally (1) imposes new information reporting obligations on financial institutions...more

Polsinelli

Timely FBAR Filing as Important as Ever Following Circuit Court Decisions

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Last week the Ninth Circuit issued a win for taxpayers in US v. Boyd, limiting penalties for non-willful violations of the requirement to file a Report of Foreign Bank and Financial Accounts (FBAR). ...more

Freeman Law

Listed Transaction Penalty Upheld by Federal Circuit Court

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Tax professionals are intimately familiar with certain reporting requirements under the Internal Revenue Code. Indeed, a failure to properly and timely report a position on a return where it is otherwise required may result...more

Lowenstein Sandler LLP

IRS Issues CARES Act Guidance for Coronavirus-Related Distributions and Loans From Tax-Qualified Plans; Also Allows Cancellation...

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides sponsors of 401(k) and other tax-qualified retirement plans with tools to give their employees who are affected by COVID-19 greater access to their...more

Foley & Lardner LLP

IRS Says ACA’s Employer Mandate is a Forever Liability – What Should Large Employers Do Now?

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Takeaway Message: The IRS has recently concluded that the Affordable Care Act’s (the “ACA”) employer mandate is an ongoing tax liability which cannot be extinguished with the passage of time. In other words, the IRS has no...more

Cozen O'Connor

IRS Asserts No Statute of Limitations for ACA Violations; May Require New Record Retention Policies

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When it comes to complying with the law, the expiration of a statute of limitations can be a welcome relief for employers trying their best to be legally compliant, but discovering that they were not 100 percent correct with...more

Kramer Levin Naftalis & Frankel LLP

IRS: Affordable Care Act Penalties Go On … and On … Forever?

The Internal Revenue Service (IRS), in a recently released memorandum from the Office of Chief Counsel (Chief Counsel Memorandum), has taken the position that the Employer Shared Responsibility Payment (ESRP) imposed by...more

Foodman CPAs & Advisors

FBAR Penalties: Is it per Account or per Violation?

U.S. Taxpayers (includes a citizen, permanent resident, corporation, partnership, limited liability company, trust and estate) are required to file a Report of Foreign Bank and Financial Accounts (FBAR) if they have...more

Orrick, Herrington & Sutcliffe LLP

Annual Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans (UPDATED)

Requirement to Report - For (1) any exercise of an incentive stock option (ISO) during 2019 or (2) transfer during 2019 of a share previously purchased pursuant to a tax-qualified employee stock purchase plan (ESPP), the...more

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