The\ncase is: United States v. Boyd, No. 19-55585 (9th Cir. March 24, 2021). Read\nthe Ninth Circuit\u2019s decision [PDF 891 KB] that includes a dissent.<\/a><\/p>\n\n\n\nBackground<\/p>\n\n\n\n
The U.S. taxpayer (an individual) did not timely file an\nFBAR disclosing her foreign financial accounts in the United Kingdom. The\ntaxpayer had a financial interest in 14 financial accounts in the United\nKingdom with an aggregate balance in excess of $10,000. The amounts in these\naccounts significantly increased between 2009 and 2011 after her father died in\n2009 and she deposited her inheritance. The taxpayer received interest and\ndividends from these accounts and did not report these on her 2010 federal\nincome tax return or disclose the accounts to the IRS. In 2012, the taxpayer asked to participate in\nthe IRS\u2019s Offshore Voluntary Disclosure Program, which is a program that\nallowed taxpayers to voluntarily report undisclosed offshore financial accounts\nin exchange for predictable and uniform penalties. After the IRS accepted the\ntaxpayer into the program, she submitted, in October 2012, an FBAR listing her\n14 foreign accounts for 2010, and amended her 2010 tax return to include the\ninterest and dividends from these accounts. The taxpayer was granted permission\nby the IRS to opt out of the program in 2014. The IRS examined the income tax\nreturn and concluded that that the taxpayer had committed 13 FBAR\nviolations\u2014one violation for each account she failed to timely report for\ncalendar year 2010 (the 14th account funded several of the other accounts). The\nlate-submitted FBAR was found to be complete and accurate. The IRS concluded\nthat the violations were non-willful and assessed a total penalty of over\n$47,000.<\/p>\n\n\n\n
The government filed suit in district court seeking to\nobtain a judgment against the taxpayer for the penalties. The taxpayer countered\nthat she had committed only one non-willful violation\u2014not 13\u2014and that the\nmaximum penalty allowed by the statute for that single non-willful violation\nwas $10,000. The lower district court\nagreed with the IRS. <\/p>\n\n\n\n
Ninth Circuit\u2019s decision<\/p>\n\n\n\n
The Ninth Circuit appeals court reversed the lower district\ncourt and concluded that 31 U.S.C. \u00a7 5321(a)(5)(A) authorizes the IRS to impose\nonly one non-willful penalty when an untimely\u2014but accurate\u2014FBAR is filed, no\nmatter the number of accounts. The Ninth Circuit held that the statute, when\nread with the regulations, authorizes a single non-willful penalty for the\nfailure to file a timely FBAR. Thus, the maximum penalty for such a violation\n\u201cshall not exceed $10,000.\u201d<\/p>\n\n\n\n
Summary<\/p>\n\n\n\n
The court decision is good news for FBAR filers. \u00a0FBAR penalty law generally provides for a three tiered penalty system: willful violations, non willful violations, and violations excused by reasonable cause. \u00a0As I have represented literally hundreds of FBAR filers who have made intentional, unintentional omissions, and\/or good-faith honest mistakes, I have seen the penalty scheme in practice and it generally makes sense. \u00a0Most of our cases are non-willful and should result in no or low penalties. The courts should not misinterpret the FBAR laws to a different or new penalty standard.<\/p>\n","protected":false},"excerpt":{"rendered":"
The U.S. Court of Appeals for the Ninth Circuit today\u2014in a case of first impression for the circuit\u2014held that the IRS is limited to imposing one penalty for the untimely filing of a single accurate \u201cReport of Foreign Bank and Financial Accounts\u201d (FBAR) that includes multiple foreign accounts. The Boyd case holds that the IRS […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3891","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=3891"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3891\/revisions"}],"predecessor-version":[{"id":3895,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3891\/revisions\/3895"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=3891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=3891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=3891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}