Advanced Strategies for Challenging FBAR Penalties: Using Administrative Procedures Act In Defending Against Assessments

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Wednesday, July 26, 2017
Recorded event now available


This webinar will provide tax counsel and advisers with a thorough and practical guide to strategies for administrative challenges and defenses against penalty assessments for FBAR violations. The panel will contrast the penalty structures between FBAR and other foreign-related information filings and focus on remedies available under the Administrative Procedures Act (APA) for challenging FBAR penalties.

Description

The IRS continues to aggressively pursue penalties for failure of U.S. taxpayers to accurately file information reports on foreign assets. This is particularly true in the case of failure to file a FinCen Form 114 (FBAR), where the Service has had several high-profile court victories upholding penalties for willful failure to file.

Unlike FATCA, which requires taxpayers to disclose information on a wide range of foreign assets which is governed by the Internal Revenue Code and Title 26 of the U.S. Code, FBAR penalty assessments are governed by Title 31 of the U.S. Code rather than the Internal Revenue Code. For taxpayers facing FBAR penalties, this distinction can provide additional opportunities for challenging penalty assessments under the Administrative Procedure Act (APA). The APA subjects federal agency actions to judicial review, to prove the agency is acting within the scope of its authority.

The IRS has traditionally been protected from this level of scrutiny in its assessment and enforcement actions. Given that the source of FBAR penalties is Title 31 and not Title 26, administrative remedies under the APA may be available to a taxpayer in challenging an FBAR assessment. These remedies are separate from those generally available to challenge tax penalties, and tax counsel must be aware of potential APA arguments in strategizing a defense against FBAR penalties.

Listen as our experienced panel provides thorough and practical guidance to administrative claims and defenses potentially available to taxpayers facing FBAR penalties.

Outline

  1. Significance of FBAR penalties under Title 31
  2. Potential application of Administrative Procedures Act to FBAR penalty defenses
  3. Strategic considerations for determining whether to make an APA argument
  4. Timing Issues
  5. Prior invocation of APA argument in FBAR case (Moore v. U.S.)
  6. Designing an FBAR defense strategy

Benefits

The panel will discuss these and other important topics:

  • Why does the APA provide possible grounds for defending against FBAR penalty assessments that are not available to taxpayers challenging other IRS foreign-related penalties?
  • Whether and at what point in the appeals process should taxpayers put forth an administrative challenged based on the APA?
  • Should taxpayers go through a pre-assessment administrative review if they are considering an APA claim?
  • What impact does an administrative claim under the APA have on the payment timing?

Learning Objectives

After completing this course, you will be able to

  • Identify circumstances under which a taxpayer facing an FBAR penalty assessment may pursue a defense against the penalties using the Administrative Procedures Act
  • Recognize how the APA applies to FBAR assessments but not generally to other tax-related penalties
  • Discern the impact of pre-assessment review and IRS appeals on a potential APA defense against FBAR penalties

Faculty

Robert Horwitz
Hochman Salkin Rettig Toscher & Perez, Beverly Hills, Calif.

Mr. Horwitz has over 35 years of experience as a tax attorney specializing in the representation of clients in civil and criminal tax cases, including civil audits and appeals, tax collection matters, criminal investigations, administrative hearings and in civil and criminal trials and appeals in federal and state courts. Before entering private practice, he was a trial attorney in the U.S. Department of Justice Tax Division and the U.S. Attorney’s Office in Los Angeles, where he represented the United States in several hundred tax cases, involving areas as diverse as captive insurance companies, tax shelters, trust fund recovery penalties, manufacturers’ excise taxes, employment taxes, criminal investigations, and tax collection. 

Steven Toscher, Esq.
Hochman Salkin Rettig Toscher & Perez, Beverly Hills, Calif.

Mr. Toscher has been representing clients for more than 35 years before the IRS, the Tax Divisions of the U.S. Department of Justice and the Office of the United States Attorney (C.D. Cal.), numerous state taxing authorities and in federal and state court litigation and appeals. His tax practice includes a wide array of substantive areas including income taxes, estate taxes, employment taxes, excise taxes, sales taxes and property taxes. He is routinely involved in sensitive issues or complex civil tax examinations and administrative appeals on behalf of individuals and their closely held entities and large corporations involving both domestic and foreign tax related issues.

Anthony V. Diosdi
Moskowitz, San Francisco

Mr. Diosdi's practice focus is on U.S. international tax, litigation, and tax controversy. Prior to joining his Firm, he was an international tax practitioner with a Big Four accounting firm and he worked in Singapore at one of the largest law firms in Asia where he assisted in matters involving international intellectual property disputes.


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