There is a disconnect between the statute and the regulation that impose penalties for violating FBAR filing requirements. Our International Tax Group covers the bases of the three court cases that have the IRS batting just 1 for 3.
The 2004 statute can impose a penalty greater than $100,000
The regulation, which wasn’t updated, limits penalties to $100,000
Two courts favor the regulation; one the statute
Read the full advisory here.
Beginning with foreign bank account reports (FinCEN Form 114, known as the FBAR) for the 2016 calendar year, FBARs will be due on April 15 of the following year. A six-month extension to October 15 will be available upon request.
FBARs of U.S. citizens and residents living abroad will be due on June 15 – with an additional four-month extension available to October 15. No additional two-month extension to December 15 will be allowed, however, as is permitted for the tax returns of U.S. persons living abroad.
These changes were part of the Surface Transportation and Veterans Health Care Choice [...]Read more
This advisory discusses United States v. Zwerner, which raised important questions not only about the FBAR penalties at issue, including their constitutionality, but also about the IRS’ administration of the Offshore Voluntary Disclosure Program.
The advisory is provided in PDF on the Alston & Bird website: http://www.alston.com/advisories/june-intl-tax/