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No FBAR Penalty Exceptions for Voluntary Disclosure and Plea Bargins

No FBAR Penalty Exceptions for Voluntary Disclosure and Plea Bargins

What a difference one court case makes. Gone is the believe that it was almost impossible for the IRS to get the BIG FBAR penalty (of half the value of the offshore bank account for each and every unreported year). United States Court Of Appeals for The Fourth Circuit reversed a district court opinion in favor of the taxpayer.

The Government brought its action seeking to enforce civil penalties assessed against J. Bryan Williams for his failure to report his interest in two foreign bank accounts for tax year 2000, in violation of 31 U.S.C. § 5314. Following a bench trial, the district court entered judgment in favor of Williams.

The Government appealed. Because the Court of Appeals concluded that the district court clearly erred in finding that the Government failed to prove that Williams willfully violated § 5314, it reversed the non-guilty verdict.

The key evidence is the CPA’s tax organizer and the plea bargain statement.

Relevant to this appeal, Williams completed a “tax organizer” in January 2001, which had been provided to him by his accountant in connection with the preparation of his 2000 federal tax return. In response to the question in the tax organizer regarding whether Williams had “an interest in or a signature or other authority over a bank account, or other financial account in a foreign country,” Williams answered “No.” J.A. 111.

Thus, we are convinced that, at a minimum, Williams’s undisputed actions establish reckless conduct, which satisfies the proof requirement under § 5314. Safeco Ins., 551 U.S. at 57. Accordingly, we conclude that the district court clearly erred in finding that willfulness had not been established.

For the foregoing reasons, we reverse the judgment of the district court and remand this case for proceedings consistent with this opinion. REVERSED

If you have Unreported Bank Accounts, call the lawyers  at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).

For more on this go to: 4th DCA Reverses DC - Intent to Evade Taxes Does Not Makes sequent Violations of FBAR Rules Willful - Willful Blindness Does. United States v. J.Bryan Williams; No. 10-2230

Read more at: Tax Times blog

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