Developing a Strategy to Fight FBAR Penalties

by Carlton Fields
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Carlton Fields

Since 2009, the number of FBAR penalties imposed for failures to report foreign bank accounts and the size of the penalties have both increased dramatically.

To ensure that defensive positions against the assessment of FBAR penalties are preserved and optimized, a proper strategy for an account holder’s case must be developed.

This article discusses the strategic considerations involved in mounting a defense to FBAR penalties based on a claim of a violation of the Administrative Procedure Act.

EXECUTIVE SUMMARY

  • The Financial Crimes Enforcement Network has delegated to the IRS enforcement authority for the foreign bank account reporting rules, including the assessment of penalties for violations of the rules.
  • Because FBAR penalties are imposed under Title 31 of the U.S. Code and not the Internal Revenue Code, the assessment and collection procedures for FBAR penalties are different than for tax penalties, and those procedures may be more susceptible to challenge based on Administrative Procedure Act (APA) violations.
  • Preserving the ability to make an APA challenge and other considerations may determine when a taxpayer should seek administrative review of the penalties.  The record created in an administrative review may strengthen the IRS’s position.
  • Once the IRS has assessed FBAR penalties, an account holder and his or her advisers must consider whether to pay the penalties and seek a refund, or to wait until the IRS brings suit to collect the penalties.

Developing a Strategy to Fight FBAR Penalties

Recent years have brought about a significantly heightened awareness concerning the potential imposition of penalties for failure to timely file a foreign bank account report (FinCEN Form 114, Report of Foreign Bank and Financial Accounts, commonly known as FBAR).[1] 

Before 2009, FBAR filing infractions were commonly resolved with relatively minor penalties.  Then, under the potential threat of criminal prosecution, combined with the U.S. effort to lift the veil of secrecy at Swiss banks, tens of thousands of taxpayers were prompted to voluntarily pay a hefty “miscellaneous offshore penalty” in lieu of FBAR penalties in various iterations of the IRS offshore voluntary disclosure program.

Now FBAR penalty cases are emerging for account holders who, willingly or unwillingly, have been subjected to IRS examinations for unreported foreign bank accounts.  Certain of these account holders willingly chose to submit to examination by opting out of the IRS Offshore Voluntary Disclosure Program (OVDP) for penalties they considered unreasonably harsh for the particular situation.[2]  Others were unwillingly snared by the turnover of account information by foreign banks or by random audits.[3]  Regardless of the route, each faces critical strategic decisions as the case moves through the examination and appeals process.  A poor strategy in defending against FBAR penalties may doom otherwise meritorious argument before they are even raised.

Because FBAR penalties arise under Title 31 of the U.S. Code (which deals with money laundering), they are not subject to the same assessment and collection procedures with which many tax practitioners are familiar.[4]  To the contrary, the only reason the IRS handles FBAR penalty examinations is because Treasury and the Financial Crimes Enforcement Network (FinCEN) have delegated enforcement authority to the IRS.[5]  Moreover, despite the potentially severe magnitude of FBAR penalties, there are no regulations or published procedures for the assessment of FBAR penalties or an administrative appeal process for account holders.  Against this backdrop, account holders and their advisers must take care to preserve and optimize defensive positions once the IRS concludes that FBAR penalties are warranted.

APA arguments could affect strategic considerations

For decades, the IRS has enjoyed what has been coined “tax exceptionalism,” essentially meaning that agency actions on tax matters have avoided the same scrutiny to which other federal agencies have been subject under the Administrative Procedure Act (APA).[6]  However, the legal landscape has changed, and the IRS increasingly is faced with successful challenges based on APA violations.[7]  Moreover, since FBAR penalties do not fall under Title 26 of the U.S. Code (the Internal Revenue Code), final actions the IRS takes on FBAR penalty enforcement may be more susceptible to APA arguments than other tax matters.

The APA provides a number of safeguards to ensure that federal agencies are acting within the bounds of their authority and that rule-making standards for the administrative enforcement of statutes by government agencies are followed and subject to judicial review.  On a high level, this requires that federal agencies engage in a prescribed rule-making process where notice and comment occurs before they adopt regulations.[8]  Further, it demands that federal agencies not take final actions that are arbitrary and capricious.[9]

A number of aspects might make FBAR penalty assessments susceptible to challenge on grounds of APA violations.  For example, although Congress increased the statutory penalty maximum in 2004,[10] FinCEN has never issued corresponding regulations to adopt the higher maximum penalties ( FinCEN, and not the IRS, has regulatory authority for the Bank Secrecy Act)[11] There is a complete absence of substantive regulations to guide the relative determinations of willful versus nonwillful violations, or to articulate standards for setting the penalty amount within the range of permissible penalties.[12]  Moreover, the IRS is not adhering to existing FinCEN regulations (reissued in 2010 without substantive changes) that still limit the maximum penalty to $100,000 per occurrence for willful penalties.[13]  And, depending on the facts of the case, the IRS’s failure to establish that it engaged in contemporaneous reasoned decision-making both in deciding to impose an FBAR penalty and determining the amount of the penalty could amount to a per se violation of the arbitrary and capricious standard.[14]

In this context, there are a number of critical decisions that an adviser must address with the account holder as they look to move beyond an impasse with the examining IRS revenue agent.

Should the account holder seek reconsideration of the proposed FBAR penalty assessment through administrative appeals?

Typically, any opportunity to further discuss and potentially resolve FBAR penalties before going to court would appear logical and desirable.  However, that may not be true if the APA is the premise of some of the account holder’s best and strongest defense arguments.[15]  That is because there generally must be final agency action to successfully invoke judicial review under the APA.[16]

In the income tax context, courts have consistently held that deficiency determinations are reviewed de novo in the Tax Court.[17]  This essentially means that all administrative actions up to and including the issuance of a Tax Court decision may be considered in determining whether the government has fulfilled its obligations under the APA.  Therefore, if an account holder seeks Appeals consideration, a court ultimately may consider any action taken by Appeals to determine whether an APA violation occurred.

Indeed, this very scenario played out in one of the few reported FBAR penalty cases.  In Moore,[18] the account holder challenged the assessment of nonwillful FBAR penalties.  Procedurally, penalties for one of the years at issue were assessed (due to an expiring statute of limitation) while assessments were proposed for the remaining years, and all years were considered by Appeals following examination.  Based on an unsatisfactory outcome at Appeals, the account holder filed suit in U.S. district court seeking a refund of the amount paid toward the assessed penalties and asking that the court reject the remaining proposed assessments.

Moore argued (among other arguments) that the proposed and assessed penalties were arbitrary and capricious, thereby violating the APA.  When the government thereafter moved for summary judgment, the district court concluded that “[t]he IRS has failed to provide a record from which the court can determine, via the judicial review provisions at § 706(2) of the APA, if it acted arbitrarily or capriciously in determining the amount of the penalties it assessed.”  Thus, the court partially denied the motion for summary judgment for the current enforcement of maximum nonwillful FBAR penalties.

The court, however, did permit the government to supplement the record to provide some basis for the court to determine whether the penalties were the product of reasoned decision-making by the IRS that was articulated in contemporaneous evidence.[19]  To satisfy the court, the government produced a memorandum written by an Appeals officer that was prepared during the appeals process.  Thereafter, in its final order, the court stated:

the supplemental declaration of [the] IRS Appeals Officer…discloses the basis for the IRS’s decision to assess the FBAR penalties.  That memorandum leads the court to conclude that the IRS did not act arbitrarily and capriciously or abuse its discretion in determining the amount of the penalties.[20]

Had the Moore case not gone to Appeals, it is not clear whether there would have been any administrative record upon which the IRS could have satisfied the reasoned decision-making standard as required by the APA.

In contrast to other areas of law that specifically require a person to exhaust administrative remedies before seeking relief under the APA, the Bank Secrecy Act does not require a person to exhaust administrative remedies.[21]

Thus, taking a case to Appeals may afford the government an opportunity to bolster its file, filling in weaknesses left by the IRS examination team.  A stronger administrative file could thereby thwart otherwise viable APA arguments.

What about pursuing post-assessment appeals?

After the IRS makes an assessment, it commonly sends out a form letter (Letter 3708) demanding payment of the assessed penalties.[22]  This letter notes that, even if the account holder did not previously request administrative review of the penalty, he or she may request a post-assessment hearing with the Appeals Office to present evidence that the debt is not owed, is not delinquent, or is not legally enforceable.

One can question what authority Appeals has to mitigate or nullify the debt once the IRS has assessed an FBAR penalty.  There are no statutes or regulations that describe this procedure or authority.  Regardless, given that the IRS recognizes its own authority in this context, an account holder could pursue a post-assessment appeal.  To the extent the account holder reaches a settlement with Appeals, the Justice Department’s approval would be required to compromise the debt owed to the United States for the assessed penalties in FBAR cases in excess of $100,000.[23]  This would not likely be problematic, however, since the Justice Department would presumably favor settlement on terms that Appeals considers appropriate.

Relative to APA arguments, a question arises as to whether the penalty assessment represents final agency action.  This question is significant because, under the APA, a federal agency cannot use post hoc or after-the-fact rationalizations to support final agency action.  The agency must demonstrate that it engaged in reasoned decision-making contemporaneous with the action taken.  If the government were to strengthen its reasons for imposing the penalty in the administrative file during the post-assessment appeal process, would the additional rationalization amount to an impermissible post hoc rationalization under the APA, or could it later be used against the account holder to counter APA arguments in court?

Because an assessment creates a legal debt obligation of the account holder (barring further successful challenge in post-assessment appeals or in court), it would appear that the assessment should represent final agency action.  Therefore, the further consideration of the post-assessment penalty by Appeals or another federal agency should not likely affect meritorious APA arguments against the final agency action.

After assessment, should the account holder pay the penalty and seek a refund or wait for the government to bring suit?

In contrast to income tax cases, the IRS has no collection authority over FBAR penalties once assessed.  Thus, if an account holder simply refuses to pay assessed penalties, the IRS must refer the case to the Bureau of the Fiscal Service for collection.[24]  Ultimately, if the FBAR penalties are not paid, the Justice Department must initiate legal action to reduce the assessed penalty to judgment and collect on it.[25]

By statute, the Justice Department is required to initiate legal action against the account holder within two years from the time an FBAR penalty is assessed.[26]  It brings suit against the account holder in federal district court.[27]  If the Justice Department declines or fails to bring suit within the two-year period, collection of the assessed penalty liability is limited to certain wage garnishments and offsets against other government payments (such as tax refunds or Social Security payments).[28]

If an assessed penalty is not paid, there may be an opportunity to discuss potential settlement with the Justice Department before it files a suit.  If the case is not settled, however, the account holder will be able to assert all available defenses in district court.  This could include, for instance, substantive arguments that the account holder did not willfully violate the FBAR reporting obligation, as well as procedural arguments premised on government violations of the APA thereby rendering the penalty assessment invalid.  Although the government has the burden to prove willfulness where a penalty for willfulness is asserted, the few cases addressing the issue concluded that the preponderance of- the-evidence standard applies, rather than the heightened clear-and convincing burden of proof that applies to civil fraud penalty assessments.[29]

The principal downside to sitting back and waiting for the Justice Department to bring suit against the account holder is that the assessed penalty is increased by interest as well as a delinquency penalty and certain collection costs in the intervening period.[30]  These amounts can easily increase the total penalty amount by 30% or more within a couple of years following assessment.  For example, an assessed penalty of $1 million that remains unpaid for two years is subject to delinquency penalties of 12% (i.e., 6% annually), plus collection costs of approximately 18%, and interest of approximately 2% (at the current annual rate of approximately 1%), for a total of 32%, or $320,000.  Thus, the liability amount that the account holder is trying to make go away just got significantly higher.  As a result, this may not be the best strategy unless the account holder and his or her advisers feel strongly about the arguments they can make in defense of the penalties.

If the assessed FBAR penalty is paid, the account holder can still make a claim to have the penalty refunded, but the chosen route for seeking review may limit available arguments.  To bring a civil refund suit against the United States, a plaintiff must establish (1) subject-matter jurisdiction in a federal court, (2) a statutory waiver of sovereign immunity, and (3) a substantive cause of action.

Federal district courts have subject-matter jurisdiction over any action for the recovery of any fines or penalties imposed by federal law.[31]  Moreover, the APA creates a cause of action against federal agencies acting under federal law and eliminates the defense of sovereign immunity.[32]

In the context of FBAR penalty refund litigation, however, a problem lies in the fact that the APA waives the sovereign immunity of the United States only for actions seeking relief other than money damages.[33]  Thus, if the account holder has fully paid the FBAR penalty, he or she cannot rely on the APA but must invoke a different waiver of sovereign immunity to seek a refund.  If the account holder has paid less than all of the assessed FBAR penalties, it may be possible to proceed in district court by seeking declaratory relief as to the invalidity of the assessment in addition to the recovery of partial penalties paid.  However, one district court recently dismissed a case seeking declaratory judgment against the enforcement of FBAR penalties based on a violation of the APA.[34]  The district court found that the plaintiffs had adequate alternative remedies to seeking declaratory judgment under the APA and therefore dismissed the case because the APA waives sovereign immunity only when the plaintiff lacks another adequate remedy elsewhere.

As an alternative, the account holder could file suit for refund in the Court of Federal Claims.  Jurisdiction is conferred on the Court of Federal Claims for claims arising under the Tucker Act, which would include claims for the recovery of monies that the government has required to be paid contrary to law.[35]  Moreover, the sovereign immunity of the federal government is waived for actions brought under the Tucker Act.[36]

If the account holder brings a refund suit in the Court of Federal Claims, however, there is a risk that the account holder may not be able to fully argue all claims of APA violations.  That is because the Tucker Act provides a limited waiver of sovereign immunity for claims arising under a “money-mandating” statute (which would not include the APA).[37]  Thus, to the extent the account holder brings a claim solely for alleged violations of the APA, the government will surely challenge the jurisdiction of the Court of Federal Claims.[38]  However, if the basis for a refund claim includes substantive arguments (e.g., the account holder was not willful), it may be possible to proceed in the Court of Federal Claims by also seeking relief on grounds of the APA standard that the IRS’s decision as to penalties is arbitrary, capricious, unsupported by substantial evidence, or contrary to law.

Develop a strategy early

As imposed by the IRS, the magnitude of potential FBAR penalties on an individual can be devastating.  Of course, the facts of each case will determine the scope and merits of arguments available to assert in defense of not having the penalties apply.  If compelling arguments can be made for potential violations of the APA by the government, particular care must be taken in deciding on a strategy for fighting proposed FBAR penalties.  Pursuing pre-assessment administrative review by Appeals may not be prudent.

Further, choosing whether to pay an assessed penalty and seek a refund versus simply waiting for the Justice Department to initiate action against the account holder may have a bearing on which judicial forum is available for litigation, as well as the extent to which viable APA defenses can be raised.  For these reasons, it is critical to develop a strategy for fighting FBAR penalties once the examining revenue agent concludes that a penalty is warranted.

Posted with permission from The Tax Advisor.

 

 

 

[1] The obligation to file an FBAR arises under 31 U.S.C. §5314 and is fulfilled by filing FinCEN Form 114 electronically through the BSA E-Filing System (available at tinyurl.com/qo9apa) by the same due date as individual income tax returns each year, although FinCEN has granted an automatic extension of time to Oct. 15 every year.  Every U.S. person with a financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country must file an FBAR if the aggregate maximum values in that person’s foreign accounts exceed $10,000 at any time during the calendar year.  Form 114 was previously known as TD F 90-22.1.
[2] Under various iterations of the OVDP, taxpayers are subject to a so-called miscellaneous offshore account penalty that is imposed at varying rates on the maximum balance of previously undisclosed foreign bank accounts.  Currently, the penalty rate is 27.5% of the maximum account balance that the account reached during the preceding eight years when disclosure is made, and the penalty increases to 50% in situations where the foreign account was held at a bank or institution identified on a list of tainted institutions maintained by the IRS.
[3] On Jan. 31, 2017, the IRS announced a “campaign” targeted at taxpayers with noncompliance issues who were denied access to the OVDP or withdrew from the program of their own accord.  See tinyurl.com/gow5lve.
[4] See 31 U.S.C. §5321(a)(5) (authorizing civil money penalties for violations of the FBAR filing requirement imposed by 31 U.S.C. §5314).
[5] Treas. Directive 15-41 (Dec. 1, 1992); Treas. Order 180-01 (July 1, 2014) (superseding prior versions of Treasury Order 180-01, dated Sept. 26, 2002, and March 24, 2003); Memorandum of Agreement and Delegation of Authority for Enforcement of FBAR Requirements (April 2, 2003) (between FinCEN and the IRS).
[6] For a general discussion of administrative law principles and the APA, see Altera Corp., 145 T.C. No. 3 (2015), on appeal to the Ninth Circuit (invalidating certain cost-sharing regulations for failing to satisfy the reasoned decision-making standard of the APA).
[7] See, e.g., Mayo Found. for Med. Educ. & Research, 562 U.S. 44 (2011) (Supreme Court held that the IRS is subject to the same administrative law principles governing review of agency action that apply for all other agencies).
[8] 5 U.S.C. §553.
[9] 5 U.S.C. §706(2)(A).
[10] Section 821 of the American Jobs Creation Act of 2004, P.L. 108-357 (amending 31 U.S.C. §5321(a)(5) to authorize an increase in maximum penalties for willful FBAR violations up to 50% of the foreign account balance).
[11] Existing FinCEN regulations governing the civil FBAR penalty are found at 31 C.F.R. §1010.820(a)–(h) (prior to the reissuance by FinCEN of Bank Secrecy Act regulations under a new chapter in 2010, those regulations were located at 31 C.F.R. §103.57(a)–(h)).
[12] Although the IRS has declared that 31 U.S.C. §5321(a)(5)(A) is “self-executing,” that conclusion is dubious given the extreme discretion inherent in the authorizing statute. See Internal Revenue Manual (IRM) §4.26.16.4.5.1(4) (rev. 7/1/08). The “self-executing” reference has since been removed, and the IRM now states that the statute “provides authority for assessing penalties when regulations for those penalties have not been issued” (IRM §4.26.7.3(1) (rev. 6/20/12)).
[13] 31 C.F.R. §1010.820(g)(2).
[14] As explained by the Supreme Court in Motor Vehicles Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29 (1983), an agency must engage in “reasoned decisionmaking” and articulate why it has exercised its discretion in a given manner.
[15] In addition, FBAR penalties are an Appeals Coordinated Issue (IRM §8.11.6.1(16)), thereby limiting the settlement discretion of an Appeals officer handling the case.
[16] 5 U.S.C. §704.
[17] See, e.g., QinetiQ U.S. Holdings Inc., No. 15-2192 (4th Cir. 1/6/17), aff’g T.C. Memo. 2015-123 (because the Internal Revenue Code provides for de novo review in the Tax Court, thereby permitting consideration of new evidence and new issues not presented at the agency level, the court held that the APA’s requirement of a reasoned explanation in support of a final agency action does not apply to a Notice of Deficiency issued by the IRS); Ax, 146 T.C. No. 10 (2016) (de novo review by Tax Court allows for new issues to be raised in amended pleading that were not addressed in Notice of Deficiency).
[18] Moore, No. C13-2063RAJ (W.D. Wash. 4/1/15) (ruling that Moore committed nonwillful violations subject to FBAR penalties, but that the administrative record before the court was not sufficient to determine whether the IRS was arbitrary and capricious in its assessment of penalties), and Moore, No. C13-2063RAJ (W.D. Wash. 7/24/15) (holding that the IRS was not arbitrary and capricious in assessing nonwillful FBAR penalties).
[19] Moore, No. C13-2063RAJ (W.D. Wash. 4/1/15).
[20] Moore, No. C13-2063RAJ (W.D. Wash. 7/24/15).
[21] See Martinez, 333 F.3d 1295, 1305 (Fed. Cir. 2003) (“courts may not require exhaustion of administrative remedies upon appeal from final agency action, except where exhaustion is expressly required by statute or rule”), citing Darby v. Cisneros, 509 U.S. 137, 147 (1993); see also Norman, No. 15-872T (Fed. Cl. 4/11/16) (noting that the government made no argument and presented no evidence that the Bank Secrecy Act contains a comprehensive review scheme that would preempt the court’s jurisdiction).
[22] As noted further below, beyond sending a demand letter for payment, the IRS has no authority to seize assets or otherwise take legal action to collect the assessed penalties.
[23] 31 U.S.C. §3711(a)(2); 31 C.F.R. §§902.1(a) and (b); and IRM §8.11.6.1(6) (post-assessed FBAR cases in excess of $100,000 cannot be compromised by Appeals without approval of the Justice Department).
[24] See 31 U.S.C. §3711(g); 31 C.F.R. §5.9, and 31 C.F.R. §285.12(c).
[25] 31 U.S.C. §3711(g)(9)(H).
[26] 31 U.S.C. §5321(b)(2).
[27] 28 U.S.C. §1355.
[28] Once assessed, the FBAR penalty becomes a debt of the account holder subject to collection under the Federal Debt Collection Practices Act in Title 28, rather than collection procedures applicable to income tax and related penalties in Title 26.  See 31 U.S.C. §3701(b)(1)(F).
[29] See Bohanec, No. 2:15-cv-4347 (C.D. Cal. 12/8/16); McBride, 908 F. Supp. 2d 1186 (D. Utah 2012); and Williams, No. 1:09-cv-437 (E.D. Va. 9/1/10), rev’d on other grounds, 489 F. App’x 655 (4th Cir. 2012) (unpublished opinion).
[30] Interest accrues from the date notice of the amount due is first mailed to the debtor at his or her most current address on FBAR penalties not paid within 30 days of the notice (31 U.S.C. §3717(b)). An annual 6% delinquency penalty is assessed on FBAR penalties that remain unpaid 90 days after assessment (31 U.S.C. §3717(e)(2)).  In addition, administrative costs are assessed for processing and handling of delinquent debts (31 U.S.C. §3717(e) (1)).  The calculation of administrative costs is based on actual costs incurred or upon estimated costs as determined by the assessing agency (31 C.F.R. §901.9(c)).  Based on recent demand letters sent by the IRS (Letter 3708), the additional debt-servicing fee arising from the referral to Treasury’s Bureau of Fiscal Service for collection is approximately 18% of the balance due.
[31] 28 U.S.C. §1355.
[32] See 5 U.S.C. §§701–706.
[33] See James v. Caldera, 159 F.3d 573, 578 (Fed. Cir. 1998).
[34] See Kentera, No. 2:16-cv-01020 (E.D. Wis. 1/30/17) (unpublished order); see also Choe, No. 2:16-cv-01019 (E.D. Wis.) (pending motion to dismiss filed on basis that sovereign immunity is not waived in action brought under the APA seeking declaratory judgment that FBAR penalty assessments are null and void).
[35] 28 U.S.C. §1491.
[36] Mitchell, 463 U.S. 206, 216–17 (1983).
[37] Martinez, 333 F.3d 1295, 1302–03 (Fed. Cir. 2003).
[38] In a pending case, the Court of Federal Claims found that it has jurisdiction to hear an FBAR penalty refund claim (without regard to any APA implications), but further invited an interlocutory appeal to resolve any difference of opinion on this controlling question.  See Norman, No. 15-872T (Fed. Cl. 4/11/16); see also Jarnagin, No. 15-1534 (Fed. Cl.) (government denied in pleadings that Court of Federal Claims has jurisdiction over FBAR penalty refund claim).

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  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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