The Strange Case of U.S. v. Hughes: Willful and Non-Willful (at the Same Time?)

- By : Parag Patel

…US taxpayer will pay willful FBAR penalties, non-willful FBAR penalties, or no FBAR penalties. U.S. v. Hughes is a strange case however because the court held that the taxpayer was…

New FBAR Court Case Makes it Easier for Taxpayers to be Deemed Willful

- By : Parag Patel

…the trend and require the higher “clear and convincing evidence” standard. “Recklessness” Means “Willfulness” In addition to applying the lower “preponderance of the evidence” standard for determining a “willful” FBAR…

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 non-willful violations relates to each foreign financial account. The taxpayer contended that, if there is a non-willful failure to file an FBAR,…

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

- By : Parag Patel

…legal grounds for non-willfulness. Do not disclose too much and beware of badges (evidence) of willfulness, blind willfulness, concealment, etc. For more information see IRS IRM 4.26.16.4.5. It is likely…

New IRS Guidelines for Willful FBAR violations

- By : Parag Patel

…a FBAR violation occurred and, for willful violations, that the violation was in fact willful. Because the FBAR penalty provision only provides maximum penalty amounts, the IRS is tasked with…

Avoiding and Defining Willfulness

- By : Parag Patel

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

Implications of United States v. Horowitz: Reckless = Willful?

- By : Parag Patel

…failure to file FBARs in 2007 and 2008 was reckless and therefore willful and they would have to pay penalties accordingly. The court in determining willfulness looked to the Supreme…

Willful FBAR Penalties

- By : Parag Patel

…return. Taxpayers who willfully file an FBAR late or not at all will be subject to high penalties for willful FBAR violations. A taxpayer will be considered willful if there…

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 non-willful penalties. The memo…

Helpful Non-willful FBAR penalty case decided by court

- By : Parag Patel

…at some non-willful 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…

Taxpayers’ Evidence of Non-Willfulness or Willfulness Factors

- By : Parag Patel

…is really non-willful. Unfortunately, the IRS has publicly stated that it will intentionally give no further definition of non-willful 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

…and persuasively demonstrate credible legal grounds for non-willfulness. Do not disclose too much and beware of badges (evidence) of willfulness, blind willfulness, concealment, etc. For more information see IRS IRM…

The legal standard of “willfulness”: Opt out to avoid high penalties

- By : Parag Patel

…is willful or non-willful is based on the facts of each case. Willfulness has been defined as the voluntary, intentional violation of a known legal duty, see Cheek 498 US…

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

- By : Parag Patel

…Risk Factors It is extremely important that a taxpayer’s eligibility is carefully analyzed because once the SDOP is elected and the taxpayer claims the violations were non-willful, the taxpayer will…

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

- By : Parag Patel

…IRS’s unwillingness to provide guidance on the issue of “willfulness” which is a key component of the Streamlined Program. Similarly, we believe the IRS’s estimate of 474,000 filers of Form…

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 non-willful. Non-willful conduct is defined as “negligence, inadvertence,…

Solution: Streamlined Domestic 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 non-willful. Non-willful conduct is defined as “negligence, inadvertence,…

New Court Ruling: FBAR penalties applied per form and not per account

- By : Parag Patel

willful violations to relate to specific accounts and the penalty for non-willful violations not to. Non-willful FBAR reporting deficiencies constitute a single violation and carry a maximum annual $10,000 civil…

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) Non-Willful and (2) Willful. The penalties are theoretically assessed per…

Caution: Increased FBAR Enforcement

- By : Parag Patel

…The willful FBAR penalty requires that the failure to report be willful. In the FBAR civil penalty context, the Courts have held willfulness is (i) specific knowing failure to file or…

New Favorable Court Decision: One penalty (not multiple) applies for late FBAR filing

- By : Parag Patel

…of the account at the time of the violation for willful violations, and $10,000 for non-willful violations. The case is: United States v. Boyd, No. 19-55585 (9th Cir. March 24,…

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

- By : Parag Patel

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

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

- By : Parag Patel

…we (DOJ) filed a complaint against Jeffrey P. Pomerantz seeking to reduce to judgment penalties for willful failure to file Reports of Foreign Bank and Financial Accounts (FBARs) for 2007,…

Federal District Court Holds that FBAR Penalties in Excess of $100,000 is Unlawful

- By : Parag Patel

…penalties. The IRS assessed penalties for willful failure to timely file FBARs from 2007 to 2010. The individual had four separate FBAR violations in 2007, and the associated penalties totaled…

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 non-willfully failed to disclose foreign assets. Under the SFCP, non-willful conduct is specifically defined…

High Penalties for failure to file an FBAR: Not Really Enforced (yet)?

- By : Parag Patel

…you fail to meet the April 15 due date. You may be subject to penalties if you willfully or non-willfully fail to file your FBAR. WILLFUL AND NON-WILLFUL CONDUCT Non-willful

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

- By : Parag Patel

…explanation for the taxpayer’s prior non-compliance, particularly because the definition of “willfulness” with respect to failure to file FBARs remains unclear.   Ways to Enhance the Quality, Utility, and Clarity…

An Ill-advised IRS Streamlined Filing Compliance Procedure Filing

- By : Parag Patel

…very ill-advised. The IRS’ SFCP is for taxpayers who non-willfully failed to disclose foreign assets. Under the SFCP, non-willful conduct is specifically defined as “conduct that is due to negligence,…

Recent Court Decision Shows Risks of IRS Streamlined Filing Compliance Procedures

- By : Parag Patel

…estate (Taxpayer) attempted to become compliant through the IRS’s Streamlined Domestic Offshore Procedures (“SDOP”). The IRS flagged the submission and assessed the maximum willful FBAR penalties against the Taxpayer because…

Details of the Streamlined Foreign Offshore Procedures (SFOP)

- By : Parag Patel

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