International Tax Disputes: FBAR Violations, Penalty Stacking, Form 3520, Accidental Americans, Passport Denials

Lessons Learned From Current and Notable Cases

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, May 24, 2022

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Course Materials

This webinar will analyze the most recent and relevant court cases affecting international taxpayers. Our panel of foreign tax veterans will detail the status of recent and notable cases and offer insights for handling common international tax and compliance problems.

Description

International tax practitioners and advisers need to stay abreast of the continually increasing number of cases and matters brought against multinational taxpayers by the U.S. government. Most familiar are the challenges brought against taxpayers for failure to file an FBAR to report aggregate foreign holdings over $10,000 as required under the Bank Secrecy Act. Although advisers are clear that there is a $10,000 penalty for noncompliance, determining how it is applied is not clear. U.S. v. Solomon, No. 20-82236 (11th Circuit 2021) is under appeal in the Eleventh Circuit Court. Here the U.S. government asserts a "violation" (and penalty) is calculated for each account on the FBAR, resulting in a substantially greater penalty than assessed, for example, in U.S. v. Boyd, 991 F.3d 1077 (9th Cir. Mar. 24, 2021) a Ninth Circuit case. The Ninth Circuit agreed with the taxpayer that the penalty was per FBAR rather than per account.

Adding to the staggering penalties and worries that FBAR filings present during a taxpayer's lifetime are the number of cases where the U.S. pursues collecting these penalties after death (U.S. v. Schoenfeld, U.S. v. Park, U.S. v. Moser …). Astounding FBAR penalties are not the only worry of international tax advisers. Challenging international taxpayers can be a lucrative pursuit. Penalties for failing to report foreign distributions by timely filing Form 3520 are the greater of $10,000 or 35 percent of the distribution. The IRS continues to aggressively pursue Accidental Americans and deny passports for unpaid taxes as well. International tax practitioners need to stay abreast of the status of the most recent international tax cases to properly advise multinational clients.

Listen as our astute panel of international tax experts reviews the most current and pertinent international tax cases so that practitioners understand how these cases affect taxpayers with foreign ties.

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Outline

  1. International tax disputes
  2. FBAR cases
    1. Noncompliance
    2. Willful vs. non-willful
    3. Penalty stacking
    4. Addressing noncompliance
  3. FBAR pursuits after the death of taxpayer
  4. Failure to file Form 3520 for transactions with foreign trusts and certain foreign gifts
  5. Accidental Americans
  6. Other cases

Benefits

The panel will cover these and other critical issues:

  • Current status of penalty stacking cases
  • Best practices for handling non-filing of FBARs
  • Differences in rulings by circuit courts in applying FBAR penalties
  • Distinguishing willful vs. non-willful FBAR violations
  • Current cases against estates for FBAR penalties of a deceased taxpayer

Faculty

Horwitz, Robert
Robert Horwitz

Principal
Hochman Salkin Toscher Perez

Mr. Horwitz has over 35 years of experience as a tax attorney specializing in the representation of clients in civil...  |  Read More

Stein, Michel
Michel R. Stein

Principal
Hochman Salkin Toscher Perez

Mr. Stein specializes in tax controversies, as well as tax planning for individuals, businesses and corporations. For...  |  Read More

Toscher, Steven
Steven (Steve) Toscher

Managing Principal
Hochman Salkin Toscher Perez

Mr. Toscher has been representing clients for more than 35 years before the Internal Revenue Service, the Tax Divisions...  |  Read More

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