If you have temporary funds that were parked in a foreign bank account only for a day or two and did not earn a single dollar of interest would it be excluded from the OVDI Penalty Base?
Tax Professional Answers
I will assume from your question that you already are familiar with the requirements of the OVDI and my answer will focus only on the aspect of the penalty addressed in your question.
There are two aspects of the penalty that needs to be considered:
1. An accuracy related penalty which is a percentage of the taxes due on income and
2. An additional penalty in lieu of FBAR.
The additional FBAR penalty is a percentage of the highest aggregate balance in the account.
The FBAR provision also states that an FBAR report is required if "at anytime during the year" the aggregate value of all foreign accounts exceed $10,000.
The FBAR penalty is therefore, a penalty for not filing and only the highest account balance is used to calculate the amount of the penalty.