Thursday, April 13, 2023

Another Taxpayer's FBAR Penalty Reduced To $40K Following Bittner

On February 28, 2023 we posted SCOTUS Ruled That Non-willful Failure To File A FBAR Report Warrants a $10,000 Penalty Per Form Not Per Account!, where we discussed The U.S. Supreme Court ruled on February 28, 2023, in Alexandru Bittner v. U.S., case number 21-1195, that the Bank Secrecy Act's $10,000 maximum penalty for the nonwillful failure to report foreign bank accounts applies on a per-form basis and not per account.

Now According to Law360, the A woman's liability for foreign bank account reporting penalties was reduced to $40,000 from roughly $170,000, citing the U.S. Supreme Court's decision Bittner v. U.S. finding the penalties are assessed on a per-form, rather than per-account, basis, according to a judgment  in U.S. v. Pauline Kaufman et al., case number 4:20-cv-00514, in the U.S. District Court for the Southern District of Texas, Houston Division on April 12, 2023.

Pauline Kaufman owes the penalties assessed against her for unintentionally failing to disclose the overseas bank accounts on Reports of Foreign Bank and Financial Accounts to the Internal Revenue Service for 2007 through 2010.

Kaufman and the federal government agreed to the $40,000 amount following the Supreme Court's decision in Bittner v. U.S., in which ruled that the penalties for nonwillful failures to correctly file FBARs are applied on a per-form basis, rather than for each account unreported. The government had filed its suit against Kaufman, seeking to collect the $170,000 in assessed penalties against her as well as around $755,000 assessed against her deceased husband for his willful failure to fail to file FBARs. 

The court entered a judgment in October holding Kaufman liable for her husband's willful penalties, as executor of his estate. But the court paused the case, and deliberations over her liability for the $170,000 in nonwillful penalties, while the Supreme Court's decision in Bittner was pending, as both the government and Kaufman told the court that the high court's conclusion on the matter would determine her liability for the penalties. 

Have an FBAR Penalty Problem?  

 Contact the Tax Lawyers at 
Marini& Associates, P.A. 
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