According to Law360, a California woman accused of failing to report her foreign bank accounts will settle penalties of $2.3 million for just under $1 million under a proposal accepted by her and the U.S., according to federal court documents in the case of U.S. v. Fariba Ely Cohen, case number 2:17-cv-01652, in the U.S. District Court for the Central District of California, Western Division.
Fariba Ely Cohen agreed to pay the U.S. $929,900 by Jan. 31, 2024, to settle allegations that she failed to report her Luxembourg bank account, according to the judgment, presented Wednesday April 6, 2022 to the U.S. District Court. Cohen had been assessed a penalty of $1.5 million for the 2008 tax year. Late payment penalties and interest pushed her liability to $2.3 million.
Cohen argued she did not understand her obligations to file reports of foreign bank and financial accounts, or FBARs.
Her Income Tax Return or Failed To Acknowledge Her
Ex-Husband's Role In Managing Their Finances, She Said.
Cohen had filed for summary judgment, arguing the penalty against her should have been capped at $100,000. The court ruled against her, stating a 2004 statute superseded the 1986 amendment to a U.S. Treasury regulation capping penalties at $100,000. The 2004 statute allows the agency to collect the greater of either $100,000 or 50% of the account balance that was not reported.
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