Disputing FBAR Penalties: Mendu Case Clarifies How Much Taxpayers Must Pay to Play


Substance is important, but procedure is often king when it comes to disputes with the IRS. This is what taxpayers facing large penalties for not reporting foreign accounts have discovered. FBAR duties are not contained in the tax code, yet the quintessential tax agency, the IRS, audits potential violations and asserts penalties. Such disconnect has sparked a number of questions, most of which center on whether FBAR penalties can be treated as a “tax” for certain purposes. This article examines origins of the FBAR, delegations of power, key tax provisions, and four noteworthy cases providing guidance on how, when, and where to fight FBAR penalties.


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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