Yearly Archives: 2021

According to Law360, victims of recent natural disasters will have an extra 11 weeks to file Reports of Foreign Bank and Financial Accounts for the 2020 tax year, the U.S. Treasury Department's Financial Crimes Enforcement Network announced.

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According to Law360, a New York woman's attempt to avoid a penalty of nearly $700,000 for failing to file foreign bank account reporting forms ended Monday after the U.S. Supreme Court declined to take up her case.

Alice Kimble had argued in Alice Kimble v. United States, case number 20-1697, in the U.S. Supreme Court that the Federal Circuit erred by upholding a ruling that she willfully failed to file the reports, known as FBARs, justifying a penalty that was excessive. Her penalty was calculated under Title 31, Section 5321 of the U.S. Code, which was amended in 2004 increasing penalties for willful violations of FBAR requirements to either $100,000 or 50% of the balance in the foreign account, whichever was higher.

Kimble claimed her failure to file a report wasn't willful because she did not know it was required. Even if it was willful, the penalty would still be limited to $100,000 because the IRS failed to draft regulations for the amended statute.

The dispute involved bank accounts with UBS in Switzerland and at HSBC in Paris. Kimble's father had opened the UBS account after surviving the Holocaust. Fearing a similar tragedy would happen in the U.S. motivated him to maintain the account for more than three decades in case the family needed to flee.

Read more at: Tax Times blog

According to Procedurally Taxing, Goode v. Commissioner, T.C. Summ. Op. 2021-34 finds another spouse seeking relief from liability under IRC 6015 failing because of the knowledge element and the lack of economic hardship.  

In the recent post entitled “Is Economic Hardship the Antidote for Knowledge in an Innocent Spouse Case?” the Tax Court has created an unmistakable pattern of finding against spouses who have knowledge of the item giving rise to the liability and do not prove economic hardship.  

The Goode Case Is Another Case Where
The Petitioner Had Three Positive Factors And
Only One Negative Factor, Knowledge.

Despite the numerical advantage of the positive factors, the knowledge factor continues to enjoy the status of a super factor, unless the taxpayer seeking relief can successfully raise the antidote of economic hardship.

Have IRS Tax Problems?

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for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
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Read more at: Tax Times blog

The Internal Revenue Service reminds U.S. citizens, resident aliens and any domestic legal entity that the extension deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is Oct. 15, 2021.

Filers missing the April 15 annual due date earlier this year received an automatic extension until Oct. 15, 2021, to file the FBAR. They did not need to request the extension.

Filers affected by a natural disaster may have their FBAR due date further extended. It’s important filers review relevant FBAR Relief Notices for complete information.

Who needs to file?

The Bank Secrecy Act requires U.S. persons to file an FBAR if they have:

1. Financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account located outside the United States, and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

Because of this threshold, the IRS encourages U.S. persons or entities with foreign accounts, even relatively small ones, to check if this filing requirement applies to them. A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

How to file

Filers do not file the FBAR with their federal income tax return. The 2020 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website. Those who are unable to e-file their FBAR must call FinCEN at 800-949-2732, or from outside the U.S. at 703-905-3975.

Avoid penalties

Those who don't file an FBAR when required may be subject to significant civil and criminal penalties that can result in a fine and/or prison.

The IRS will not penalize those who properly reported a foreign account on a late-filed FBAR if the IRS determines there was reasonable cause for late filing.

Have IRS Tax Problems?

     Contact the Tax Lawyers at

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog