Supreme Court | TaxConnections

14 Sep 2022

Foreign Accounts Penalty Case Heads To Supreme Court

Tax filing – and penalties – for foreign accounts may soon be the subject of a major legal decision.

The U.S. Supreme Court plans this fall to hear Bittner v. U.S. This case presents a conflict over statutes under the Bank Secrecy Act (BSA). The question is whether a “violation” under the BSA is the failure to file an annual FBAR no matter the number of foreign accounts or whether there is a separate violation for each account that isn’t properly reported.

The 1970 BSA initially charged the U.S. Treasury Department with collecting information from U.S. persons who have financial interests in or signature authority over financial accounts maintained with financial institutions outside the U.S. In 2003, the Treasury delegated enforcement to the Internal Revenue Service. Although only willful violations were initially subject to penalty, Congress amended the act in 2004 to include penalties for non-willful violations.

Regulations require filing a single annual FBAR for anyone with an aggregate balance over $10,000 in foreign accounts. The penalty for non-willful violation is up to $10,000.

Written by Alicea Castellanos | Posted in Supreme Court

26 Jun 2018

Supreme Court Refuses To Review Million Dollar FBAR Penalty

Despite the taxpayer’s persistent challenges, the Supreme Court has refused to review a Ninth Circuit Court of Appeals’ decision affirming a lower court’s decision in favor of the IRS, which assessed a giant $1.2 million penalty for failing to disclose financial interests in an overseas account.

The April 30th decision, which is now final, is noteworthy for two reasons. First, it shows the magnitude of penalty that can be reached, even with respect to an individual and a single foreign account and tax year (in this case, the relevant tax year was 2006). Second, it shows the type of taxpayer arguments that courts will likely reject when reviewing an FBAR penalty case.

Written by Ephraim Moss | Posted in FBAR • FBAR Penalaty • Supreme Court

28 May 2018

Supreme Court Decision Further Confirms FATCA Is Here To Stay

One of the key pieces of legislation used by the U.S. government in its effort to combat tax evasion abroad is the Foreign Account Tax Compliance Act (FATCA). To the surprise of many, FATCA remained completely untouched by Trump’s sweeping tax reform passed late last year.

A recent decision by the Supreme Court further evidences that FATCA likely will not be repealed or amended any time soon. Last month, a legal challenge to FATCA was thwarted when the United States Supreme Court refused to review the Sixth Circuit Court’s decision affirming a lower court ruling which dismissed the case brought against FATCA.

Written by Ephraim Moss | Posted in FATCA • Supreme Court

27 Dec 2017

Texas Supreme Court Denies Three-Factor Apportionment In Graphic Packaging

In its Graphic Packaging Corporation v. Hegar decision rendered December 22, 2017, the Texas Supreme Court fell in line with the rejection of the Multistate Tax Commission (MTC) optional three-factor apportionment provisions, citing the California Supreme Court Gillette decision,² the Minnesota Supreme Court Kimberly Clark decision,³ and the Oregon Tax Court decision in Health Net. Read More

Written by Allea Newbold at Ryan, LLC | Posted in Supreme Court

06 Feb 2017

New Supreme Court Justice Gorsuch And His Tax Stance

President Donald Trump selected Judge Neil M. Gorsuch of the Tenth Circuit Court of Appeals to fill the vacancy in the Supreme Court. Judge Gorsuch draws much similarities to Judge Anthony Scalia, whom he is replacing, after his death in 2016. There are a lot of political decisions one might get into, but we are going to look at how some of the decisions Judge Gorsuch made on tax-related issues.

Written by Kat Jennings | Posted in Supreme Court