The U.S. dropped a lawsuit that sought $835,000 in penalties against a Texas customs broker for failing to report his Mexican bank accounts, with the government saying a U.S. Supreme Court ruling has reduced the bill to $80,000, which the broker has paid.
Miguel E. Mireles, a U.S. citizen originally from Mexico, has already satisfied the reduced bill for his failure to report his Mexican bank accounts for tax years 2006 through 2013 through a $90,000 balance he has with the Internal Revenue Service, the U.S. said in its with Mireles. Mireles agreed not to seek a refund for any remaining balance, which stems from $208,000 in payments he has made on three different penalty liabilities.
The Supreme Court in February restricted how much the IRS could fine a taxpayer for nonwillful failure to file Reports of Foreign Bank and Financial Accounts, or FBARs. The Bank Secrecy Act's $10,000 maximum penalty for nonwillful reporting applies per form and not per bank account, the justices said in their opinion in Bittner v. U.S.
The IRS had originally calculated FBAR penalties against Mireles for $90,000 to $110,000 per year for the eight-year period during which he failed to report his accounts, according to the agreement. Under the new Bittner standard, those penalties were reduced to $10,000 per year.
Since 1995, Mireles has run a company that provides "customs brokerage services, processed foreign trade operations and border trade services for goods transferred between the United States and Mexico and vice versa," the government seeking to enforce the penalties.