Supreme Court Rejects FBAR Penalty Case

Supreme Court Rejects FBAR Penalty Case

Supreme Court Rejects FBAR Penalty Case

Supreme Court Rejects FBAR Penalty Appeal Case: In the past few years, there have been several District Court and Appellate cases involving FBAR penalties. Courts across the nation are split on how FBAR Penalties are applied by the US Government, with key issues involving:

    • what is the burden of proof;

    • how to establish willfulness;

    • does an (outdated) FBAR Regulation limit willfulness penalties; and

    • are non-willful penalties limited to one violation per year or can multiple non-willful FBAR penalties be issued in the same year.

In one recent case US v. Kimble, a key issue is whether or not the lower standard of willfulness (aka reckless disregard) is sufficient proof for the courts to issue willfulness penalties.

Key FBAR Issue in Kimble

In Kimble, the key issue centered around whether signing a tax return under penalty of perjury can be considered reckless disregard. While there were several other issues that gave the impression of willfulness, the holding was founded on the basis of reckless disregard and the signing of the tax return — which led to willful FBAR penalties being issued against Kimble.

Certiorari Denied in Kimble

On October 4, 2021 the Supreme Court rejected Kimble and Certiorari was Denied.

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