Page 6 - Penalties.The Government’s New Stance That the Non-Willful Civil FBAR Penalty Applies to.JTPP_22-02_Rule
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5 Case No 8:19-cv-792. the court stayed the for each foreign account defendant failed to 2015). this provision of internal Revenue Manual
case pending decision in Boyd, in which the disclose.”); Hughes, 2020 WL 1536509 at *6 (N.D. is simply not supported by any statutory or regu-
Patels filed a “Brief of Amici Curiae Laxman, Ca. March 31, 2020) (“each failure to report each latory authority. in addition the iRM’s “purpose
Jashu, Hiten, and anita Patel in support of bank account for each year an FBaR is required is to govern the internal affairs of the internal
Defendant-appellant.” is a separate violation.” (citing Boyd)). Revenue service,” not to impose new penalties,
6 Government’s Brief in Boyd at 9. 11 the Bank secrecy act of 1970, P.L. 91-508, 84 stat. and it does not “have the force and effect of
7 2019 WL 1976472 at *2 (C.D. Cal. april 23, 2019) 1114 and amendments (31 UsC §5311, et seq.). law.”H.L. Horne, Ca-1, 83-2 ustc ¶9548, 714 F2d
(emphasis added). 12 31 UsC §5314(a) (emphases added); see also n. 2. 206, 207 (emphasis added). See also Norman, 942
8 L.D. Jarnagin, FedCl, 2017-2 ustc ¶50,426, 134 13 Government’s Brief in Boyd at 19. F3d at 1114 (“it is well settled … that the iRM is
FedCl 368, 370 (emphasis added). 14 31 CFR §1010.350(a) (emphases added). not legally binding on courts”).
9 Whistleblower 22716-13W, 146 tC 84, 90 (2016) 15 31 CFR §1010.306(d) (emphases added). 22 942 F3d 1111, 1114 (2019) (emphasis added).
(emphasis added). See also Yermian, 2016 WL 16 31 UsC §5321(a)(5)(B)(i) (emphases added). 23 2016 WL 1642968 at *5 (s.D. Ohio april 26, 2016)
1399519 at *4 (C.D. Ca. March 18, 2016) (same); 17 31 UsC §5321(a)(5)(C) (emphasis added); 31 UsC (emphasis added).
Kentera, 2017 WL 401228 at *2 (e.D. Wis. Jan. 30, §5321(a)(5)(D). 24 M. Crawford v. United States Department of
2017) (“For non-willful violations [of the require- 18 31 UsC §5321(a)(5)(B)(ii) (emphasis added). Treasury, Ca-6, 2017-2 ustc ¶50,315, 868 F3d 438,
ment to file a single FBaR per year], the penalty 19 2019 WL 1976472 at *4. 443, 450 (emphasis added).
cannot exceed $10,000.”). 20 the Financial Crimes enforcement Network; 25 Government Brief in Boyd at 27 (emphasis
10 See Ott, 2019 WL 3714491 at *2 (e.D. Mich. aug. 7, amendments to the Bank secrecy act added).
2019) (with no explanation, holding that: “When a Regulations—Reports of Foreign Financial 26 Barber v. Thomas, sCt, 560 Us 474, 488 (2010).
violation [of the FBaR filing requirement] is non- accounts, 75 FR 8844-01, 2010 WL 667290, at 27 Leslie Salt Co., Ca-9, 55 F3d 1388, 1398 (1995).
willful, … the secretary may impose a penalty of *8854 (Feb. 26, 2010) (emphasis added). 28 Johnson, sCt, __ Us __, 135 sCt 2551, 2577 n.1 (2015)
up to $10,000 per account per year.”); Gardner, 21 the iRs has taken the position that a non-willful (thomas, concurring) (emphasis added).
1019 WL 1767120 at *3 (C.D. Ca april 22, 2019) (stat- penalty can be applied on a per account basis, 29 A. Mohamed, 106 tCM 537, Dec. 59,685(M), tC
ing, without analysis, that “the iRs is authorized but only in unusual cases, and only with a group Memo. 2013-255 at **25–26.
to assess an FBaR penalty not exceeding $10,000 manager’s approval. iRM 4.26.16.6.4.1 (Nov. 6, 30 2019 WL 1976472 at *4 (emphasis added).
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34 Journal of taX praCtICe & proCedure Summer 2020