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$4.3 Million Penalty for Foreign Accounts Upheld Against Estate

July 13, 2021, 8:00 PM

An estate must pay nearly $4.3 million for a man’s failure to report foreign bank accounts because new legislation overrode a regulation that had capped the penalty at $100,000, a federal appeals court ruled.

The estate of Harold Kahn argued that a 1987 regulation capping the penalty for willful failures to report foreign accounts at $100,000 remained in effect in 2009, despite 2004 legislation allowing penalties of up to 50% of the value of a foreign account. But a three-judge panel of the U.S. Court of Appeals for the Second Circuit concluded on Tuesday that the regulation “contravened both the ...