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Zhanna Ziering Comments on Colliot Decision Impacting FBAR

June 8, 2018, MLex US Tax Watch

A Texas federal judge's May 15 order that the Internal Revenue Service's authority to impose penalties for a willful failure to file a Report of Foreign Bank and Financial Accounts (FBAR) is capped at $100,000 per violation stunned many in the FBAR world.

. . .

"The Colliot decision was surprising," Zhanna A. Ziering, a tax litigator with Caplin & Drysdale's New York office, told MLex® US Tax Watch. "Those of us in the FBAR community are closely watching this and the Colorado case, as they could greatly affect the FBAR landscape and the IRS's ability to assess penalties."

. . .

Appeal Prospects

Assuming the IRS appeals the Colliot order, the case would go to the Fifth Circuit, which Taylor said has a reputation for being a maverick and is not always inclined to side with the government. An appellate review would likely come down to a statutory analysis of whether 31 CFR 1010.820(g)(2) is consistent with the statute, said Ziering. To Taylor, the Colliot decision "makes a lot of sense logically," although he said it is possible the appellate courts could rescue the government from itself.

For the full article, please visit MLex’s website (subscription required).

Excerpt taken from the article “Court Decision Rocks FBAR World” by Kristen Parillo for MLex.

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