Taxpayer Wins District Court Case on Calculation of Non-Willful FBAR Penalties

ByJustin Hughes - JD, CPA, LLM

In U.S. v. Bittner [1](available here: link), the U.S. District Court for the Eastern District of Texas (the “Court”) handed taxpayers a victory by declining to follow the legal analysis in Boyd v U.S.   In doing so the Court rejected the IRS’s interpretation of what constitutes a “violation” for purposes of computing non-willful FBAR penalties…

Tax Court Rejects Taxpayer’s Reasonable Cause Argument Regarding Automatic Penalties from Failure to File Forms 5471
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Tax Court Rejects Taxpayer’s Reasonable Cause Argument Regarding Automatic Penalties from Failure to File Forms 5471

ByJustin Hughes - JD, CPA, LLM

Flume v. Commissioner (here) revolved around one noteworthy issue: did the taxpayer’s reliance on the advice of his tax return preparer spare the taxpayer from $110,000 in penalties for the taxpayer’s failure to report foreign investments on Form 5471? The taxpayer argued that he relied on the expertise of his tax return preparer to guide…