Summary Judgment FBAR – IRS Summary Judgment FBAR
Sometimes, the non-payment of FBAR penalties may lead to litigation. While a Taxpayer (or the IRS) cannot generally use Tax Court as a means for fighting or enforcing FBAR penalties (FBAR is a creature of FinCEN and only “enforced” by the IRS — which limits Tax Court jurisdiction), that is not the end of the line.
Rather, the IRS can sue the Taxpayer in either Federal Court of Claims or District Court to reduce the assessed penalties to judgment, or the Taxpayer can pay the FBAR penalties, and then sue the IRS for refund.
Summary Judgment FBAR
With FBAR summary judgment, either party is seeking to avoid a long, drawn-out trial on a particular issue (or issues).
For example, a Taxpayer may want to seek summary judgment (or at least “partial summary judgment”) against the IRS.
One recent example was in the case of Horowitz, when the spouse of the main defendant (her husband) was able to secure a “partial” summary judgment on certain issues involving her requirements to file an FBAR.
Willful and FBAR Summary Judgment
Since the penalties for a Willful Violation of FBAR can be very serious, Taxpayers will often try to ”move” for summary judgment on the basis that the IRS cannot pursue willful penalties — thereby significantly limiting the Taxpayer’s exposure to FBAR Penalties.
Avoiding FBAR Penalties
Of course, the best way to avoid a messy litigation with the IRS is to try to be proactive from the start, and either remain in compliance, or submit to one of the IRS Tax Amnesty/Voluntary Disclosure Programs.
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Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.