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$3.2 Million IRS Penalty for Unreported Offshore Account Upheld

April 19, 2021, 10:54 PM

A nearly $3.2 million penalty for willfully failing to report an offshore bank account isn’t subject to the Eighth Amendment’s restriction on excessive fines, the U.S. Court of Federal Claims ruled in a win for the government.

Taxpayer Leon Landa challenged the penalty for failing to file a timely Report of Foreign Bank and Financial Accounts for 2009 for a Swiss bank account held in his name. The IRS imposed the hefty penalty for willfully violating the reporting requirement—worth 50% of the account balance—under the Bank Secrecy Act.

In rejecting Landa’s constitutional challenge, the court on Monday concluded that ...