It is not every day a taxpayer can claim a major victory in a fight against the Internal Revenue Service (IRS). A man from Texas can make such a claim. The man took on the government in a battle over foreign accounts. The government has come down hard on those who fail to comply with complex reporting requirement for foreign accounts. In this case, they demanded the man pay a fine of 50 percent of the account total on each account for every year the account was in violation of reporting requirements.
The man pushed back. He took the government to court over the issue and built his argument around the language of the original statute crafted to address this issue. That statute states the fine should be no more than a maximum of $100,000. True, this is still a hefty fine. However, the accounts in question each held over $1 million. A $100,000 fine was much more manageable than 50 percent of the account for every year the man allegedly failed to report the accounts.
As the title of this post notes, the man won. The court stated the government could not impose a fine that exceeded $100,000 for each account in question.
Although this is a major victory for taxpayers, it also serves as a reminder of the continued governmental crackdown on foreign accounts. The reporting requirements are complex and difficult to navigate. A failure to properly report can lead to both civil and criminal penalties. Various compliance options are available. An attorney experienced in the resolution of offshore account issues can review your situation and provide guidance on the best way to come into compliance.