Can a California Resident Prove her FBAR Violation was Unintentional
The case at issue is U.S. vs. Fariba Ely Cohen.
How are FBAR Violations Issued
So far, it has been an uphill climb for defendant. In an earlier ruling, the court held that the U.S. was not limited to a $100,000 Maximum FBAR penalty (not that Defendant was “willful,” but that the $100,000 was not the cap). This particular argument ($100,000 willful limitation) has lost steam over the past few months, with most courts siding against the $100K cap.
U.S. Pursues Summary Judgment
After winning on a partial summary judgment re: limitation of penalties, the U.S. is back and trying to move for Summary Judgment against Defendant on the issue of FBAR willfulness.
Summary Judgment and FBAR
With a summary judgment motion, the U.S. is trying to show that there is no genuine dispute of material fact sufficient to withstand the movant party’s motion to decide the case on the pleadings, and that Defendant was willful.
Of course, defendant is seeking to avoid this outcome, and lodged her own: “Defendant’s Statement of Genuine Disputes of Material Fact In Opposition To Motion For Summary Judgment.”
The purpose of Defendant’s motion is to withstand the summary judgment motion.
Can Defendant Show her actions were Unintentional?
Defendant wants to show her non-compliance was unintentional. This would work to show her actions were non-willful, and save her from FBAR willfulness penalties.
What are Defendant’s Arguments?
It appears from the pleadings that Defendant claims she did not necessarily sign nor authorize her ex-husband to sign on her behalf for several of the tax documents. And, when she did sign her own returns, it was under threat of physical, mental and emotional abuse from her ex-husband. In addition, it appears she is disputing specific knowledge about some of the foreign accounts. These facts would all go to her ability to have made an independent decision, and could reduce any violation to non-willful instead of willfulness – thereby reducing her penalty.
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