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Shifting Currents in FBAR PenaltiesShifting Currents in FBAR Penalties

A review of recent decisions.

Rita M. Ryan, Senior Manager

October 21, 2024

16 Min Read
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Prior to 2023 and 2024, taxpayers faced significant challenges in contesting penalties for failing to report foreign accounts via the Foreign Bank and Financial Accounts (FBAR). However, recent court decisions signal a shift in the legal landscape. Despite this change, FBAR litigation remains far from straightforward. The cases discussed below share a common theme: They explore various approaches to challenging assessed FBAR penalties. Each case, though, has a different approach: focusing on what defines a “violation” and who’s considered a “U.S. person;” whether answers to check-boxes signal “willfulness;” and whether an FBAR penalty is “excessive.”

What’s a Violation?

The changes in the FBAR case decisions started in 2023 with the decisi...

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About the Author

Rita M. Ryan

Senior Manager, Wolf & Company, P.C.

Rita leads Wolf’s International Tax Services Practice, where she focuses on tax planning and compliance for international holdings. Rita has extensive experience advising clients on the tax aspects of cross-border business activities, structuring international investments, and the United States compliance obligations relating to these activities and investments for both entities and individuals. Rita also works with other tax professionals as a trusted advisor to identify necessary reporting, advise on filings, or review work papers and prepared forms to ensure accuracy in this evolving international compliance landscape.

Prior to joining Wolf, Rita was in private practice as an Associate Attorney at the law firm of Vacovec, Mayotte & Singer, LLP where she focused in the areas of international and domestic taxation, estate planning, and tax controversy.

Rita is an Adjunct Professor at the Graduate Tax Program at Boston University School of Law where she co-founded and co-teaches “Foreign Information Reporting and Withholding.” She also teaches various other international tax topics for Strafford Publications, Tax Practice Pros, and Wolters Kluwer.