If you have unreported foreign accounts, you are not alone. Every year, I speak with hundreds of clients with tax non-reporting issues (e.g., FBARs, Form 8938, Form 3520, Form 3520-A, etc.). The good news: the IRS offers...more
2/24/2023
/ FBAR ,
Foreign Bank Accounts ,
Income Taxes ,
Internal Revenue Code (IRC) ,
International Tax Issues ,
IRS ,
Legal Representatives ,
Offshore Funds ,
Reporting Requirements ,
Tax Liability ,
Tax Planning
Introduction -
Much of the current litigation between taxpayers and the United States has centered on the definition of willfulness or whether the non-willful FBAR penalty should apply on a per year or per account basis. ...more
The Bank Secrecy Act (“BSA”) requires United States persons (“USPs”) to file FinCEN Forms 114, Report of Foreign Bank and Financial Accounts (“FBARs”), for each calendar year in which the aggregate amount(s) in certain...more
The Bank Secrecy Act requires certain taxpayers to submit timely FBARs to the United States reporting their interests in foreign accounts. If a taxpayer has an FBAR filing requirement and misses it, the taxpayer can be...more
Missing any deadline is stressful. But missing a tax deadline is more so. Per the Bank Secrecy Act (Title 31 of the U.S. Code), certain taxpayers must file so-called FBARs (currently FinCEN Form 114) with the government...more
Federal case and after federal case continues to come out providing real-life examples of the pitfalls of filing a Streamlined Filing Compliance Procedure (“SFCP”) with the IRS when the facts suggest willfulness rather than...more
As a general matter, the FBAR is not a difficult tax form to prepare, at least for most taxpayers and their tax professionals. At its very basics, it merely asks for identifying information regarding the taxpayer and certain...more
The IRS and FBARs - On March 30, 2022, the IRS issued Publication 5569, Report of Foreign Bank & Financial Accounts (FBAR) Reference Guide. The 12-page publication provides helpful information to both taxpayers and tax...more
FBAR Penalties - On March 8, 2022, the Southern District of New York issued its Opinion in the case of United States v. Schik, No. 20-cv-0221 (MKV), 2022 U.S. Dist. Lexis 41148 (S.D.N.Y. Mar. 8, 2022). In that case, the...more
The concept of “willfulness” is an important one in the FBAR civil penalty context. Indeed, a taxpayer’s willful failure to file a timely and accurate FBAR may result in significant penalties: the higher of 50-percent of...more
Willful FBAR Penalties - The Schwarzbaum case has received a lot of attention in the last few years from tax professionals. For example, in 2020, the district court concluded—contrary to some other federal court...more
In most cases, IRS exam initiates FBAR assessments. And, after an IRS examiner determines that an FBAR penalty is appropriate, taxpayers are generally afforded pre- or post-assessment appeals rights with the IRS Independent...more
United States citizens and residents[i] are subject to federal income tax on their worldwide income. For example, even if a United States citizen permanently relocates to a foreign country, he or she will generally continue...more
1/6/2022
/ FBAR ,
FOIA ,
GAO ,
Income Taxes ,
International Tax Issues ,
IRS ,
Offshore Funds ,
OVDP ,
Retirement Plan ,
Revenue Procedures ,
Tax Evasion ,
Tax Planning ,
Voluntary Disclosure
On November 30, 2021, the United States Court of Appeals for the Fifth Circuit issued its opinion in U.S. v. Bittner. Contrary to decisions of other federal courts, the Fifth Circuit concluded that it was proper for the IRS...more
On July 29, 2021, the United States Attorney for the Southern District of New York, the Assistant Attorney General for the Department of Justice Tax Division, and the IRS Commissioner all announced that a federal court in New...more
8/9/2021
/ Criminal Investigations ,
Department of Justice (DOJ) ,
FBAR ,
Financial Institutions ,
Foreign Financial Accounts ,
IRS ,
Offshore Banks ,
Offshore Funds ,
OVDP ,
Panama Papers ,
Reporting Requirements ,
Tax Avoidance ,
Tax Evasion
The IRS’ streamlined filing procedures were first offered by the IRS on September 1, 2012. Since that time, the IRS has made several revisions. A current summary of the IRS’ Streamlined Filing Compliance Procedures is...more
I have previously written on the Bittner (E.D. Tex.) case in a prior Insight. Briefly summarized, the taxpayer, Mr. Bittner, was a dual citizen of both Romania and the United States. However, in 1990, he moved back to...more
10/10/2020
/ Appeals ,
Business Taxes ,
Calculation of Penalties ,
Civil Monetary Penalty ,
Congressional Intent ,
Cross Motions ,
Dual Citizenship ,
Failure-to-File ,
FBAR ,
Foreign Bank Accounts ,
Genuine Issue of Material Fact ,
Income Taxes ,
IRS ,
Reasonable Cause Defense ,
Reporting Requirements ,
Romania ,
Rule of Lenity ,
Summary Judgment ,
United States