IRS Found To Exceed Cap On Penalty For Offshore Reporting

Law360 (May 18, 2018, 9:15 PM EDT) -- The Internal Revenue Service went beyond the cap on civil penalties it can assess for undisclosed offshore bank accounts, a Texas federal judge has ruled, rejecting the agency's argument that regulations limiting the amount are implicitly invalid.

The IRS had sued a Texas man to collect hundreds of thousands of dollars in unpaid civil penalties, plus interest, for the taxpayer's allegedly willful failure to report offshore accounts on Foreign Bank and Financial Accounts forms for 2007 through 2010. Even though a regulation from 1987 limits the penalty cap for willful nondisclosure at $100,000, the agency had argued that Congress made changes...

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