Willful FBAR Violations: Distinguishing Willful and Nonwillful, Relevant Factors, Mitigating Penalties

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

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Conducted on Tuesday, June 21, 2022

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Course Materials

This webinar will examine the most recent and notable cases and guidance surrounding FBAR violations. Our astute panel will cover the factors differentiating willful and nonwillful violations, what constitutes willful blindness, enforcement measures, and steps taxpayers can take to mitigate and avoid FBAR penalties.

Description

The FBAR penalties are not tax penalties and are separated into two categories. The IRS can assess nonwillful violation penalties up to $10,000 per account and, egregiously higher, willful violation penalties up to the greater of $100,000 or 50 percent of the amount in the account at the time of the violation for FBAR reporting noncompliance. The government has the burden of proof in establishing willfulness, which is defined as a voluntary, intentional violation of a known legal duty. However, the IRS is only required to meet the lowest threshold, the preponderance of the evidence standard, to prove a taxpayer willfully violated the FBAR statute.

There are no clear-cut standards for defining a willful violation. Instead, it is a facts and circumstances determination. Many taxpayers are indeed unaware of their FBAR filing obligation. Even though no intentional action is required to evoke the penalty, reckless disregard or willful blindness could turn what would otherwise be a nonwillful oversight into a willful one. Certain factors contribute to the classification of an FBAR violation as either willful vs. nonwillful. Tax professionals working with international individuals need to understand the significant differences between willful and nonwillful FBAR violations.

Listen as our panel of international tax reporting experts reviews the latest guidance for assessing penalties for failing to file the FBAR, including strategies to avoid willful violations.

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Outline

  1. FBAR: background
  2. Nonwillful violations
  3. Facts contributing to willful violations
  4. Facts contributing to nonwillful violations
  5. Relevant cases
  6. Mitigating penalties
  7. Enforcement measures
  8. Best practices

Benefits

The panel will review these and other critical issues:

  • Factors that contribute to a willful FBAR violation classification
  • Strategies to avoid willful FBAR violations and penalties
  • Notable cases and guidance surrounding FBAR noncompliance
  • What is willful blindness and how does this affect the classification of FBAR penalties?

Faculty

Kalungi, Ronald
Ronald Kalungi, JD, LLM
Director of International Tax
Drucker & Scaccetti

Mr. Kalungi provides tax planning, tax compliance and business consulting services to a broad base of clients including...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.
Founder/Managing Partner
McCormick Tax

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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