A very recent FBAR case teaches us a few things. My colleague, attorney John Richardson, noted this after reading the case: "When charities need to raise money they will often have a bake sale or an auction. When the US government wants to raise money it uses an 'FBAR Fundraiser'". Readers, draw your own opinion! … Continue reading Recent FBAR Case: IRS Seeks “Willful” Penalty $8.8M Without Much Regard for the Facts
The Bank Secrecy Act (BSA) contained in Title 31 of the United States Code, requires that every year US persons must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and to keep certain records with regard to these accounts. The reporting is done by filing … Continue reading Oops… Made a Mistake on an FBAR?
The Treasury Inspector General for Tax Administration (TIGTA) just issued a damning report on FATCA: Additional Actions Are Needed to Address Non-Filing and Non-Reporting Compliance Under the Foreign Account Tax Compliance Act (Report # 2022-30-019 4/7/22), available here. The TIGTA audit was undertaken to evaluate IRS efforts to actually use the reams and reams of … Continue reading Treasury Inspector General Says FATCA is a Big Fat Flop ….So Far
Meet the Zuhovitzky’s, the quintessential international couple: Jonathan (a naturalized US citizen and Israeli citizen living in Germany) and Esther (an Austrian and Israeli citizen who was never a US citizen or resident). I blogged about them and the IRS’ aggressive stance on asserting so-called FBAR penalties against Jonathan for having a power of attorney … Continue reading FBAR Traps: International Couples, Powers of Attorney
Ka’Ching! It’s a win for the Internal Revenue Service (IRS)! At the end of November, in United States v. Bittner, (No. 20-4059, 5th Cir. 11/30/21), the Fifth Circuit overruled the lower court and held that the FBAR non-willful US$10,000 penalty applies on a per account rather than a per form basis. The taxpayer was hit … Continue reading FBAR – Fifth Circuit, Non-Willful Penalty Multiplies “Per Account” in Bittner Case
The case of US v Schwarzbaum (decided October 26, 2021), discussed in today’s blog post, serves as a harsh reminder of how far the US government will go to collect FBAR penalties. The importance of posting about this latest development is to underscore how aggressive FBAR penalty collection efforts are now becoming. Of course, this case … Continue reading IRS Determined to Collect FBAR Penalties – “We Have Ways of Making You Pay” … Even if Your Money is Outside the US
It’s been no secret that the Internal Revenue Service (IRS) has cracked down on crypto. With many more taxpayers investing in cryptocurrencies the agency has targeted crypto investors who are often not complying with the US tax rules (many unknowingly). IRS “John Doe” subpoena activity of crypto exchanges has been successful with the biggies such … Continue reading Checked “YES” to the Crypto Question on Form 1040? Have NFTs? Get Ready….
Here are two recent cases regarding FBAR - One, a taxpayer win and the other a taxpayer loss. Let's start with the good news: The taxpayer win! The penalty for non-willful FBAR violations is generally US$10,000 per violation. The question is, what is the "violation"? The Internal Revenue Service (IRS) believes this penalty applies for … Continue reading FBAR Developments: “Non-Willful” Taxpayer Wins & “Willful” Dead Taxpayer Loses Beyond the Grave!
Today’s post involving the case of Jonathan Zuhovitzky presents some important takeaways: The IRS can get very aggressive when it comes to assessing “willful” FBAR penalties. We see this trend is on the rise. A diligent representative, however, can get the IRS to settle an FBAR matter that is favorable to the taxpayer. It takes … Continue reading Taxpayer’s FBAR WIN: “Willful” Penalty over $9.8 Million for Mere Signature Authority — Removed Entirely
Since the passage of the Foreign Account Tax Compliance Act (FATCA) in 2010, we’ve been inundated with mountains of information about this legislation including its implementing Treasury Regulations, Internal Revenue Service (IRS) announcements and notices, reams of articles, books, blog postings as well as a Twitter-verse awash with FATCA-esque tweets. Following FATCA’s roll-out, hordes of … Continue reading FATCA 11 Years Later – US Still the Tax Haven?