Difference Between Willful and Non-Willful Penalties: Analyzing FBAR Violations (Golding & Golding)

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What are the Penalties for Not Filing FBAR? (2024 Update)
When it comes to having to report foreign bank accounts, assets, and investments, the first international tax form that comes to mind for most taxpayers is the FBAR. The FBAR refers to foreign bank and financial accounts reporting (aka FinCEN Form 114). Unlike most other international tax reporting forms, the FBAR is not an IRS form. Rather, it is a FinCEN (Financial Crimes Enforcement Network) form -- although the Internal Revenue Service is tasked with enforcement, compliance, and assessing penalties for failing to file the form timely and accurately. When it comes to FBAR penalties, there is a lot of misinformation online about:
- How FBAR penalties are assessed,
- How FBAR penalties can be challenged,
- How to qualify for an FBAR penalty abatement, and
- How to file a lawsuit against the U.S. government for Taxpayers who want to litigate.
In addition, there was a recent Supreme Court case (Bittner) that limits the IRS's ability to assess non-willful FBAR penalties, along with another recent court case that (may) allow taxpayers who make certain treaty elections to avoid having to file the FBAR. Let's walk through the FBAR penalties framework, including examples and recent cases to be aware of.