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Summary of the IRS FBAR Post-Assessment Penalty Process
Post-assessment FBAR penalties put the taxpayers into a tough spot. The reason is because now the IRS is in the top position. In addition, the taxpayer cannot fight the FBAR penalty in tax court. Rather, the taxpayer will usually have to pay the penalty and seek a claim for refund, or be sued – and then fight the matter in court.
Post Assessment FBAR Penalties
Post-Assessment is a when the IRS collects “already assessed penalties” It means the IRS can seek to aggressively enforce the penalties, as well as file a lawsuit in court and seek to reduce the penalty to judgment.
A few key points about post-assessment penalties:
IRS Office of Appeals is Limited in reducing penalties
Post-assessed FBAR cases in excess of $100,000 (excluding interest, penalties and administrative costs) cannot be compromised by Appeals without approval of the Department of Justice (DOJ). See 31 USC § 3711(a)(2) and 31 CFR
Appeals Can Handle Post-Assessment FBAR Penalties
The FBAR penalty case will usually be received in Appeals as a pre-assessed case. However, in certain circumstances, Appeals will also conduct post-assessment hearings to consider FBAR penalty liability and collection. Whether the penalty is pre- or post-assessed when it comes to Appeals, it is considered the same penalty and only one appeal is available.
Post-Assessment are the IRS Priority
Post-assessment FBAR penalty cases are priority cases and must be worked expeditiously. See IRM 8.11.6.9.3, FBAR Closing – Post-Assessment case.
Tax Court is Not the Proper Venue
The venues for challenging FBAR penalties are the United States District Courts and the Court of Federal Claims, not the United States Tax Court.
FBAR Post-Assessment Case Update
The recent trend in FBAR cases is for the IRS to assess penalties, and actively seek to reduce the penalties to judgment. Many courts have sided with the IRS, and agreed to issue willful penalties, either through trial or summary judgment.
Here are a list of recent cases, and a link to the Golding & Golding summary:
- U.S. v Schwarzbaum (Taxpayer’s request for Summary Judgment denied)
- U.S. v. Burga ($120mm penalty and Kovel issue)
- U.S. v. Ott (Reasonable Cause requires “substance”)
- U.S. v. Bittner ($3M “Non-Willfiul” Penalty issued)
- U.S. v. Tonnison (FBAR Enforcement Post-OVDI)
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.
- Learn more about the Board-Certified Tax Lawyer Specialist credential
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- Learn more about Golding & Golding’s Case Accomplishments
- Learn more about Golding & Golding Testimonials from prior clients
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 & 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 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
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today
Golding and Golding, Board-Certified Tax Law Specialist
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.