Foreign account holders challenging non-willful Foreign Bank
Account Report (FBAR) penalties are finding success in federal
courts across the country. Mark Oberstaedt and Kenneth Ahl of
Archer & Greiner P.C. summarize some key decisions where
federal trial and appeals courts have rejected the IRS's
interpretation of the penalty calculation in the statute.
Within days of each other, taxpayers on both coasts scored major
victories last spring against the Internal Revenue Service in
separate cases involving the issue of the taxpayers' alleged
non-willful failure to file a proper Foreign Bank Account Report
(FBAR). Both courts interpreted the non-willful penalty provisions
of the Bank Secrecy Act in favor of the taxpayers, and the results
should encourage other taxpayers and their accountants to consider
fighting similar penalties or to seek refunds of previously-paid
penalties.
