Implications of Recent Foreign Bank Account Reporting Litigation

Abstract

ABSTRACT Foreign Bank Account Reporting (FBAR) has emerged recently as a litigation matter in several federal courts. While past cases primarily focused on the determination of willful versus nonwillful FBAR violations, recent cases bring to light issues that should lead Congress to revisit requirements and legislation specifically related to penalties. This paper examines four specific topics recently discussed in the courts: the assessment of penalties per FBAR form or per account; Eighth Amendment challenges; payment of penalties by an estate; and repatriation of assets to pay penalties. We address what the recent FBAR litigation tells us about compliance, enforcement, and policy and encourage Congress to revisit and make changes to the law.