FBAR Penalty Per Form or Per Violation

Per Form FBAR Penalty for Non-Willful

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In United States v. Zvi Kaufman No. 3:18-cv-00787, the U.S. Government sought to enforce IRS non-willful FBAR penalties against the taxpayer for several years of noncompliance. There was no dispute as to the fact that taxpayer filed the FBAR late -- but rather the dispute goes to whether penalties were justified. More specifically, the courts considered:

Did Taxpayer show Reasonable Cause to avoid penalties; and
If not, are FBAR penalties issued per form or per violation

In general, Courts across the nation are in flux about how to uphold FBAR penalties. At one time, it was believed (by IRS' own personnel) that the IRS should have to meet the clear and convincing evidence burden -- but this standard has been rejected by courts nationwide. There is also a lack of continuity involving what constitutes willfulness vs. non-willfulness -- and what the maximum penalty can be for willful FBAR violations.