More FBAR Penalty Losses and Lessons: The Significance of Rum and Ott



People generally despise paying taxes. They take various steps to avoid this hated duty, including hiding funds in a foreign financial account. A decade ago, depending on their methodology, taxpayers had a fighting chance of avoiding detection by the Internal Revenue Service . They did not file Forms TD F 90-22.1 or FinCEN Forms 114 (“FBARs”) to alert the IRS, and they simply watched as their money grew abroad on a tax-free basis, with relatively little concern that their day of reckoning would someday come. Now, though, things have changed.  The IRS has a long list of tools for finding unreported foreign accounts, and the Department of Justice is more than happy to assist by initiating lawsuits to collect unpaid FBAR penalties. While focused on similar issues, each FBAR case is unique, teaching valuable lessons about the evolving definition of “willfulness,” key procedural issues, etc. This article centers on the two most recent cases, Rum and Ott, and what they add to the dialogue on FBAR penalty defense.

Listen in to learn more about

  • Duties related to foreign accounts
  • Penalties for FBAR Violations
  • Lessons learned from recent cases
  • Contributions by two new FBAR cases: Rum and Ott

About Hale E. Sheppard

HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

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