Willfully Failing to Report Foreign Accounts Can Lead to a Stiff Penalty

Willfully Failing to Report Foreign Accounts Can Lead to a Stiff Penalty

But courts are split on whether the fine is capped. Under the statute, the fine is the greater of $100,000 or 50% of the highest balance in the accounts. Meanwhile, regulations state that the penalty shall be no greater than $100,000. Eight district courts have addressed the conflict between the regs and the statute. Two say the Service is bound by the $100,000 cap set forth in the regulations, and six agree with the agency that the statute controls. In the most recent case, IRS slapped a $614,000 penalty on a man for willful failure to disclose his accounts. The court reviewed the state of the law and upheld the fine (Schoenfeld, D.C., Fla.).