In a recent court case, a court found\nthat \u201cwillfulness\u201d in the context of civil FBAR penalties is satisfied by\nrecklessness and does not require disregard of a known legal duty. In United\nStates v. Horowitz, (4th Cir. Oct. 20, 2020), the taxpayers failed to file\nFBARs for a multi-million dollar Swiss bank account for 20 years and never paid\ntax on the account\u2019s interest income. <\/p>\n\n\n\n
In\nthe case, Peter and Susan Horowitz, U.S. citizens, opened bank accounts in\nthree Swiss banks after moving to Saudi Arabia in 1984. They continued to\nmaintain one of these accounts after moving back to the United States in 2001.\nThey did not file FBARs from 1983 through 2008 citing no knowledge of the\nrequirement until 2009. The government assessed willful violations and\npenalized each spouse for both 2007 and 2008. <\/p>\n\n\n\n
The Fourth Circuit affirmed the\ndistrict court\u2019s holding that the Horowitz\u2019s failure to file FBARs in 2007 and\n2008 was reckless and therefore willful and they would have to pay penalties\naccordingly. The court in determining willfulness looked to the Supreme Court\u2019s\ndecision in Safeco Insurance Co. v. Burr<\/em>, 551 U.S. 47 (2007), to find\nwillfulness includes reckless violations of a standard as well. The court\nreasoned the Horowitz\u2019s were reckless because they did not mention the foreign\naccounts to their accountant and signed tax returns inaccurately denying the\nexistence of any foreign bank accounts on signed tax returns.<\/p>\n\n\n\n This case has major implications on\nthe assessment of FBAR penalties in the future. U.S. Taxpayers will not only be\nconsidered willful when they knowingly fail to report foreign accounts but they\nwill also be considered willful when they recklessly fail to report foreign\naccounts.<\/p>\n\n\n\n Taxpayers\nwho have foreign accounts or have been sent a violation for failure to file an\nFBAR should contact Patel Law Offices. Over the years, our office has\nsuccessfully assisted numerous taxpayers regarding their FBAR and tax\ncompliance issues.<\/p>\n","protected":false},"excerpt":{"rendered":" In a recent court case, a court found that \u201cwillfulness\u201d in the context of civil FBAR penalties is satisfied by recklessness and does not require disregard of a known legal duty. In United States v. Horowitz, (4th Cir. Oct. 20, 2020), the taxpayers failed to file FBARs for a multi-million dollar Swiss bank account […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3946","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\/3946","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=3946"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3946\/revisions"}],"predecessor-version":[{"id":3947,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3946\/revisions\/3947"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=3946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=3946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=3946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}