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US Court finds non-willful FBAR penalty not limited to $10,000 per year

- By : Parag Patel

of $10,000 under 31 U.S.C. § 5321(a)(5)(B) for nonwillful violations relates to each foreign financial account. The taxpayer contended that, if there is a nonwillful failure to file an FBAR,…

Taxpayer’s Beware: Proving Non-Willful Conduct in the new IRS Streamlined Filing Compliance Procedures

- By : Parag Patel

or having secret meetings with advisers or account representatives. The amount of money is also important: the larger the asset value, the less likely it is nonwillful. Evidence of nonwillful

Taxpayers’ Evidence of Non-Willfulness or Willfulness Factors

- By : Parag Patel

is really nonwillful. Unfortunately, the IRS has publicly stated that it will intentionally give no further definition of nonwillful conduct for purposes of the Streamline Compliance Programs (SFOP or the…

How to Demonstrate Non-Willfulness Under The Streamlined Filing Compliance Procedures

- By : Parag Patel

…under penalties of perjury that their conduct was “nonwillful.” For purposes of the streamlined procedures, nonwillful conduct is defined as conduct that is due to negligence, inadvertence, or mistake or…

New Much-Needed Guidance for Non-Willful FBAR violations

- By : Parag Patel

…in FBAR case file information. We find that the guidance is much needed in light of the lack of uniformity in the IRS’ application of FBAR nonwillful penalties. The memo…

Helpful Non-willful FBAR penalty case decided by court

- By : Parag Patel

…at some nonwillful FBAR penalty litigation. The US district court has essentially dismissed a taxpayer’s challenges to his penalty for failing to file FBARs (Report of Foreign Bank and Financial…

New IRS Disclosure Program Announced for Non-Resident Taxpayers: Streamlined Foreign Offshore Procedures

- By : Parag Patel

nonwillful (or possible willful) conduct and careful crafting of a certification of nonwillfullness is required for each taxpayer. Qualified experienced legal counsel should analytically draft this certification, under attorney-client privilege,…

A solution in a tough tax season: the IRS Streamlined Offshore Procedures

- By : Parag Patel

…criteria. One critical criterion is that taxpayers must establish – to the satisfaction of the IRS – that their non-compliant behavior was nonwillful. Nonwillful conduct is defined as “negligence, inadvertence,…

ABA COMMENTS ON THE 2014 OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : Parag Patel

…FATCA regulations and the Intergovernmental Agreements is whether the person was born in the United States.   In theory, if the taxpayer’s noncompliance was due to nonwillful conduct, the taxpayer…

Streamlined Filing Compliance Procedure’s New Revisions to Streamlined Foreign Offshore Procedures (SFOP)

- By : Parag Patel

…taxpayers with evidence of willful failure to disclose foreign assets. Specifically, SFCP is for taxpayers who nonwillfully failed to disclose foreign assets. Under the SFCP, nonwillful conduct is specifically defined…

Details of the Streamlined Foreign Offshore Procedures (SFOP)

- By : Parag Patel

…The IRS introduced SFCP in June 2014 for taxpayers who nonwillfully failed to disclose foreign assets. Under the SFCP, nonwillful conduct is specifically defined as “conduct that is due to…

New Warnings in the IRS’ Streamlined Filing Compliance Procedures

- By : Parag Patel

…significantly expanded by the IRS in June 2014 in order to provide a meaningful way for nonwillful taxpayers to remedy past non-compliance with respect to non-U.S. bank accounts and income…

2018 ABA COMMENTS ON THE OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : Parag Patel

…domestic nonwillful non-filers. This runs afoul of the intent of the SDOP because it penalizes nonwillful taxpayers, including Accidental Americans who do not meet the SFOP residency requirement, students and…

New Streamlined Domestic Offshore Procedures (SDOP) is a Game Changer

- By : Parag Patel

5472, 8938, 926, and 8621) with respect to the foreign financial asset, and (4) such failures resulted from nonwillful conduct. Nonwillful conduct is conduct that is due to negligence, inadvertence,…

Streamlined Filing Compliance Procedure’s New Revisions to Streamlined Domestic Offshore Procedures (SDOP)

- By : Parag Patel

…SFCP is for taxpayers who nonwillfully failed to disclose foreign assets. Under the SFCP, nonwillful conduct is specifically defined as “conduct that is due to negligence, inadvertence, or mistake or…

IRS Announces New Rules for FBAR Penalties

- By : Parag Patel

There are two types of penalties applicable to FinCEN Form 114 (Report of Foreign Bank and Financial Accounts) (FBARs): (1) NonWillful and (2) Willful. The penalties are theoretically assessed per…

Avoiding and Defining Willfulness

- By : Parag Patel

willfulness is, it only uses vague terms to describe what it is not. The line between nonwillfulness and willfulness remains unclear. Over the last few months, informal remarks of an…

Details of the Streamlined Domestic Offshore Procedures

- By : Parag Patel

…modified the nonwillfulness certification form that individual taxpayers must submit to enroll in the streamlined filing compliance procedures (SFCP). Specifically, SFCP is for taxpayers who nonwillfully failed to disclose foreign…

IRS announces new Streamlined Filing Compliance Procedures

- By : Parag Patel

streamlined procedures must complete and submit the “nonwillful” certification statement available athttp://www.irs.gov/pub/irs-utl/CertUSResidents.pdf. Advocacy is required to affirmatively and persuasively demonstrate legal grounds for nonwillfulness. Do not disclose too much and…

IRS Official Provides Insights for the new IRS Streamlined Compliance Procedures

- By : Parag Patel

…streamlined procedures so both U.S. and non-U.S. residents who certify their tax noncompliance was nonwillful can qualify for 5% or zero penalties. At the same time, the IRS said it…

Swiss Government and US Government Announce New Program for Cooperation and Disclosure by Swiss Banks

- By : Parag Patel

…of December 31, 2014, or the effective date of an FFI Agreement under the Swiss IGA, or the date of the Non-Prosecution Agreement or Non-Target Letter if that date is…

2016 US Dept of Justice (DOJ) Tax Division: FBAR penalty collection cases

- By : Parag Patel

…a complaint seeking a judgment for the penalties assessed against Ashish Patel for his nonwillful failure to file FBARs in 2007-2011 reporting his interest in foreign bank accounts held at…

IRS Form 8938 and the Offshore Voluntary Disclosure Program (OVDP)

- By : Parag Patel

…untruthful) Form 8938 at this point is likely to turn previous nonwillful non-compliance into a willful one. For example, Question 3a of Form 8938 indirectly asks a problematic question: the…

What Is The Difference Between the SDOP and the Current OVDP program?: Willfulness

- By : Parag Patel

…needs to be prepared to defend filing a SDOP and be able to demonstrate their nonwillfulness and show there was no fraud. Nonwillfulness certification In the streamlined procedures, taxpayers must…

Streamlined Procedures for U.S. Taxpayers Residing In the United States

- By : Parag Patel

…the foreign financial asset; and such failures resulted from nonwillful conduct. Comment: It appears that the Domestic Streamlined Program is not available to non-filers. Scope and Effect of Domestic Streamlined…

New Comments of the IRS’ New Streamlined Filing Compliance Procedures for Non-Resident Non-Filer U.S. Taxpayers

- By : Parag Patel

…Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers (see IRS Instructions here). David Horton, a senior official from the IRS, made some interesting statements about Non-Low Risk Account Holders…

New Court Case Limits the Reasonable cause exception to FBAR penalties

- By : Parag Patel

…taxpayer fails to file FBARs on time, he or she may be exposed to penalties. Assuming that non-disclosure was accidental or otherwise nonwillful, the penalty is capped at $10,000 per…

New IRS Form 8938 Statement of Foreign Financial Assets is causing significant confusion

- By : Parag Patel

…the failure to file (or being untruthful) Form 8938 at this point is likely to turn previous nonwillful non-compliance into a willful one. For example, Question 3a of Form 8938…

Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers

- By : Parag Patel

failure, and if the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities. This program has been established for non-resident non-filers. Generally amended returns will…

New Post-OVDP IRS Voluntary Disclosure Procedures Announced

- By : Parag Patel

…Again, in exceptional circumstances with convincing evidence, the taxpayer can instead request the lower nonwillful FBAR penalties (e.g., $10,000) instead of willful penalties. Again, compelling legal advocacy will be very…