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Case: Reckless Disregard of FBAR Reporting Requirement Proves Willfulness (E.D. Mich.)

Feb. 27, 2020, 5:00 AM

Willful blindness may be proven by objective recklessness in the civil FBAR context, a district court held. Taxpayer, whose reported income was around $20,000, deposited thousands of dollars in Canadian financial institutions but never filed an FBAR. The accounts’ maximum balance reached over $1 million. Taxpayer never informed his accountant of the account’s existence and used his sister’s Canadian mailing address for correspondence and she rarely forwarded him the mail. When he discovered his obligation, Taxpayer participated in the IRS’s OVDI program but withdrew when penalties could be less if action deemed not willful. After auditing Taxpayer’s returns, the IRS ...

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