U.S. Files Lawsuit for Non-Willful FBAR Penalty Enforcement

U.S. Files Lawsuit for Non-Willful FBAR Penalty Enforcement

U.S. Seeks Court for Non-Willful FBAR Enforcement: In a recent 2019 case filing, the U.S. seeks to enforce a $32,000 penalty against a taxpayer residing in Bermuda, and reduce the assessed FBAR penalties to judgment. Even though the penalties are non-willful and the Taxpayer seemingly tried to submit to offshore voluntary disclosure, the U.S Government and is still moving forward, full steam ahead in enforcing the IRS FBAR Penalties.

U.S. vs. Priscilla Brown (Case No.: 1:19-cv-3703)

Defendant has been residing in Bermuda since 1993. She maintained bank accounts in Bermuda. More specifically, she maintained bank accounts and investment accounts — including a money market and savings account — at Bank of N.T. Butterfield and Son Limited.

Taxpayer Entered Offshore Disclosure in 2014 & Filed Delinquent FBARs in 2017

In reviewing the complaint on file, the timing and sequence is a bit off. From the complaint, it is unclear if defendant entered OVDP or just submitted a Form 14457 in 11/2014. She did not file the delinquent FBARs until later in mid-2017, and she was only assessed non-willful penalties.

*2014 is the same year the stand-alone Streamlined Procedures took effect.

As provided by the complaint:

“On or about November 11, 2014, the Defendant voluntarily disclosed to the U.S. Internal Revenue Service (the “IRS”) via an offshore voluntary disclosure letter (the “Form 14457”) that she had offshore bank accounts whose aggregate values totaled between $100,000.00 and $1,000,000.00 between the calendar years of 2007 through 2014.

In her Form 14457, the Defendant voluntarily disclosed that she owned and/or controlled three (3) relevant foreign accounts (a savings account (the “Savings Account”), a checking account (the “Checking Account”), and a money market account (the “Money Market Account”)) at a foreign bank, Bank of N.T. Butterfield and Son Limited (“Butterfield”), in Bermuda.”

The IRS Sought Non-Willful Penalties Only

The IRS has 6 years to enforce FBAR compliance. Here, the defendant was hit for penalties in 2011-2013.

As provided by the complaint:

“The Defendant failed to timely file a FBAR for calendar years 2011, 2012, and 2013, despite her obligation to do so.

On the Assessment Date of June 5, 2018, a delegate of the Secretary of Treasury assessed FBAR penalties against the Defendant in the amount of $30,000.00 (the “Assessed FBAR Penalties”). The Assessed FBAR Penalties are proper and fall within the civil penalty limits imposed by 31 U.S.C. § 5321(a)(5)(B)(i).

Interest and penalties have accrued on the FBAR penalties since the assessment date and, as of July 3, 2019, the total amount owed was $32,261.09.

Therefore, the Defendant is liable for $32,261.09 as of July 3, 2019, pursuant to 31 U.S.C. § 5321(a)(5) and 31 U.S.C. § 3717, plus further interest, penalties, and statutory additions to those amounts accruing after July 3, 2019 to the date of payment pursuant to 31 U.S.C. § 3717.”

FBAR Disclosure Amnesty – Golding & Golding (Board-Certified)

We specialize exclusively in international tax, and specifically IRS offshore disclosure.

We have successfully represented clients in more than 1,000 streamlined and voluntary offshore disclosure submissions nationwide and in over 70-different countries. We have represented thousands of individuals and businesses with international tax problems.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants and Financial Professionals worldwide.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Golding & Golding Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Streamlined Counsel?

How to Hire Experienced Streamlined Counsel?

How to Hire Experienced FBAR Counsel?

Generally, experienced attorneys in this field will have the following credentials/experience:

  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • Dually Licensed as an EA (Enrolled Agent) or CPA
  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience

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