We recently posted DC Determined That IRS Arbitrarily Calculated $1.5M FBAR Penalty, where we discussed that a California District Court in Margaret J. Jones v. U.S., case number 2:19-cv-04950, in the U.S. District Court for the Central District of California, determined that the IRS arbitrarily calculated a penalty of over $1.5 million for a woman who failed to file foreign bank account reports.
The $1.5 million was an arbitrary figure because it was based on her 2013 account balances instead of 2011,when she had less money in her accounts, Jones added. Had it been based on the latter, she would have owed about $37,000 less, she said. Jones moved for summary judgment to dismiss the penalty and on the charge she willfully failed to file.
We also recently posted DC Finds That FBAR Penalty Not Violate 8th Amendment & Imposed a Penalty of $12.9M Based Upon FMV on June 30, where we discussed that a Florida District Court in U.S. v. Isac Schwarzbaum, case number 9:18-cv-81147, in the US District Court for the Southern District of Florida, has determined that Schwarzbaum, will pay the IRS a $12.9 million penalty for failing to file reports on his foreign bank accounts, a federal court ordered after having determined that the agency erred when it calculated the penalty at $13.7 million or $800,000 more than the court determined to be correct.
Judge Bloom rejected the agency's arguments, saying it should have obtained the balance information before it assessed penalties. Using the $100,000 figure where the balances were estimated, she added half of the June 30 account balances, calculating the penalty amount at $12.9 million (down from the original $35,729,591.00 or 1/3 of the original assessment).
When representing taxpayers who have rolled out of the OVDP program or are being audited and assessed the willful FBAR penalty, be sure to check the IRS' calculation of the FBAR penalty and ensure that is based upon the balance in the foreign account as of June 30 of the following year!
Read more at: Tax Times blog
