Southern California Law Firm Beats IRS in FBAR Case

The Law Offices of A. Lavar Taylor LLP, a prominent tax controversy firm located in Santa Ana, CA, is pleased to announce that it has prevailed against the IRS on behalf of their client, Jane Boyd, in a case of first impression in the 9^th Circuit Court of Appeals.  The case, United States v. Boyd, involved the question of whether the IRS can penalize a taxpayer who non-willfully files a late Foreign Bank Account Report (“FBAR”) up to $10,000 for each foreign account listed on the late-filed FBAR (“$10,000 per account”); or instead can only impose a single penalty of up to $10,000 (“$10,000 per FBAR”), even where the FBAR reports multiple foreign accounts.

In an opinion issued on March 24, 2021, The Ninth Circuit reversed the holding of the District Court and held that the IRS may only impose a penalty of up to $10,000 per FBAR, regardless of the number of accounts shown on the late-filed FBAR, where a taxpayer non-willfully files a late, but accurate, FBAR. The opinion in Boyd characterized the government’s position that it can impose a “per account” penalty of up to $10,000 where the taxpayer non-willfully files a late, but accurate FBAR as not a reasonable position.

The Ninth Circuit’s opinion may be found here:  [link] https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/24/19-55585.pdf.

The IRS had previously assessed a penalty against Ms. Boyd of almost $50,000 for her late filing of her 2010 FBAR. That penalty exceeded $10,000 because Ms. Boyd’s 2010 late filed FBAR reflected multiple foreign bank accounts. As the result of the Ninth Circuit’s opinion, the penalty against Ms. Boyd cannot exceed $10,000.

U.S. citizens and residents who have foreign bank accounts and who have certain other types of foreign accounts  are required to file an FBAR for any year where the value of these foreign accounts exceeds $10,000 during that year.  A failure to a timely, complete and accurate FBAR can result in serious financial penalties, as well as a criminal prosecution, if the IRS concludes that such a failure was “willful.”  If the IRS is seeking to penalize you for a lack of compliance with the rules governing the filing of FBARs, or if you have any questions about these rules, the Law Office of A. Lavar Taylor stands ready to assist you.

A. Lavar Taylor, Attorney and Founder of the Law Offices of A. Lavar Taylor, LLP (http://www.Taylorlaw.com), is widely recognized as an authority in civil and criminal tax controversy law. Mr. Taylor has been named as one of “The Best Lawyers in America” and is a frequent speaker at tax seminars.