IRS’s Streamlined Compliance Procedure Program
On November 30, 2021, the United States Court of Appeals for the Fifth Circuit issued its opinion in U.S. v. Bittner. Contrary to decisions of other federal courts, the Fifth Circuit concluded that it was proper for the IRS to impose non-willful FBAR penalties against the taxpayer, Mr. Bittner, on a per-account, rather than a per-year, basis. The Fifth Circuit further concluded that Mr. Bittner had failed to establish reasonable cause for abatement of the penalties.
To be sure, the recent decision in Bittner is not taxpayer-friendly. Indeed, all taxpayers who currently reside in the Fifth Circuit—i.e., those in the States of Texas, Louisiana, and Mississippi—should take a careful watch of the decision, particularly if they have undisclosed foreign bank accounts. Because the civil penalties can now be quite large under the rationale of Bittner, taxpayers should consider whether it is appropriate to enter into the IRS’s Streamlined Filing Compliance Procedures to mitigate their exposure to potential civil penalties.
Facts of Bittner’s Case
Recent Comments