Bulgaria is the most recent country to ink a deal with the United States to implement FATCA, the Foreign Account Tax Compliance Act. Passed by Congress in 2010, the law is designed to stomp out offshore tax evasion by targeting U.S. taxpayers with unreported offshore accounts.

Under the law, foreign banks and financial institutions must report accounts belonging to U.S. taxpayers to their local taxing authority. The local taxing authority, in turn, must turn this information over to the U.S. upon receipt of a “group request.” However, before this information can be exchanged, the local taxing authority must obtain the consent of those U.S. accountholders who are affected. This is usually accomplished through what’s called a “declaration of consent.” This is the essence of a Model 2 Treaty between the U.S. and Read More

Williams Court Yields To Government’s Claims That It Be Given Expansive Discretion For Asserting Willful FBAR Penalties

In Zwerner, the jury imposed multiple-year willful FBAR penalties at the maximum. Recall that the maximum willful FBAR penalty is the greater of $ 100,000 or 50% of the undisclosed account’s balance on the key date (June 30, as interpreted).

The jury was not asked to review the IRS’s assertion of the maximum willful FBAR penalty. Thus, a key issue left unresolved was whether the IRS’s decision to assert maximum willful FBAR penalties is reviewable. Assuming so, what standard would the trier of fact – here, the jury – apply in determining whether something less than the maximum penalty Read More