Foreign Trust Beneficiary Liable for a Double Tax Penalty?

Foreign Trust Beneficiary Liable For A Double Tax Penalty?

Can the sole owner of a foreign trust who is also its sole beneficiary be penalized twice for not filing a single Form 3520? Can the IRS choose the higher penalty for the beneficiary in this situation? In Wilson v. United States, No. 19-cv-5037 (BMC) (E.D.N.Y. 2019), the IRS argued that it could impose pick…

IRS Penalties for Late-Filed Forms 5471

Airline Pilot Stationed Overseas Not Entitled To Section 911 Foreign Income Exclusion

The Dewees v. United States, 16-cv-01579 (D.D.C. 2017) case is a good reminder that late-filed Forms 5471 should include reasonable cause statements. These statements can be submitted under the IRS’s Delinquent International Information Return Submission Procedures to avoid penalties being assessed. The Facts and Circumstances in Dewees Dewees is a U.S. citizen who lived in…

Reckless Conduct Sufficient for FBAR Civil Tax Penalty

Subchapter S Corporation Losses Limited By Tax Basis

It is not clear as to what level of conduct justifies the imposition of the $100,000+ foreign bank account reporting (“FBAR”) civil tax penalty. In Bedrosian v. United States, No. 15-5853 (E.D. Pa. 2017), the court considered whether reckless conduct is sufficient given the facts presented in the case. The FBAR Civil Tax Penalty The…

The IRS’s Streamlined Procedures for Foreign Accounts

Online Account Trigger Fbar Filing, Not Poker Websites

Given its limited resources and ability to detect foreign assets, accounts and income, the IRS has offered various voluntary programs to entice taxpayers to come clean and report this information. The IRS’s OVDP program and the more recent streamlined procedures are two examples. The Maze v. Internal Revenue Service, Nos. 15-1806 (D.D.C. 2016), highlights several…

Online Account Trigger FBAR Filing, Not Poker Websites

Online Account Trigger Fbar Filing, Not Poker Websites

In Hom v. United States, No. 14-16214 (9th Cir. 2016), the court addressed whether an online payment account and whether poker websites triggered FBAR filing requirements. The stakes are high with FBAR penalties, so those with foreign accounts should take heed. FBAR Filing Requirements Taxpayers with an interest in or authority over certain foreign accounts…