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

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.

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.