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IRS Cannot Assess More Than $100,000 Willful FBAR Penalty

IRS Cannot Assess More Than $100,000 Willful FBAR Penalty

Court Slams IRS: Can’t Assess More Than $100,000 “Willful” FBAR Penalty


The Internal Revenue Service (IRS) must be fuming over the recent court decision in United States v. Colliot (W.D. Texas, Austin Division, Case No. AU-16-CA-01281-SS).  The case was initiated by the US Government to reduce to judgment outstanding civil penalties assessed against Ms. Colliot for her “repeated and willful failures to timely file” an FBAR for the years 2007-2010.

“Willful”  FBAR Penalty Cannot Exceed $100,000

Ms. Colliot argued that the IRS cannot assess a “willful” penalty in excess of $100,000 even though the relevant statute permits a penalty assessment of the higher of $100,000 or 50% of the maximum amount in the unreported foreign account.  The court provides an excellent summary of the historical changes to the relevant FBAR statute and implementing Treasury regulations, and those with an interest should definitely read the court order.

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