Court Overturns Legendary FBAR Case, Bedrosian, but Settlement Elsewhere Encourages Others with Foreign Account Issues.

 



Litigation over unreported foreign account is unpredictable. Many rejoiced in 2017 when a District Court determined in Bedrosian v. United States that the taxpayer was not “willful” in failing to declare a large Swiss account. They were down, though, when the same District Court, on remand, reluctantly held that the taxpayer acted “recklessly,” which sufficed. Less than one month later, the government agreed to settle willful FBAR penalty case at the last minute in Jones v. United States. Details of the settlement are confidential, but logic dictates that the government, after a string of FBAR victories and a win in Bedrosian, would not concede anything, unless it had real concerns about losing and setting precedent favorable to taxpayers. The enclosed article describes the applicable law, the two notable FBAR decisions, and where things stand with respect to willfulness.


 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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