U.S. – FOREIGN BANK REPORTING (FBAR) PENALTIES
A January 1, 2019 Society for Trust and Estate Practitioners article (Failure to properly review US tax return incurs maximum FBAR wilful penalty) discussed the case of an individual who accidentally ticked “no” in the box asking whether she had offshore accounts in respect of her Offshore Voluntary Disclosure Application (Kimble v USA, Case 1:17-cv-00421-SGB). The penalties, equal to 50% of the highest balance in the account, totalled approximately $700,000 U.S. The Court found the error sufficient to indicate wilful default. The Court also noted that signing the return equates to a taxpayer’s constructive knowledge of the contents. Signing the return without reviewing the return amounted to a reckless disregard of her legal duties.
For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 458.