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"Willful" FBAR

Writer's picture: Yulia Langolf, CPAYulia Langolf, CPA

Updated: Oct 8, 2021

DO YOU KNOW ABOUT requirements for Report of Foreign Bank and Financial Accounts (FBAR)? A married couple, Peter and Susan Horowitz failed to report their Swiss bank accounts opened in 1988. They said they did not know about the requirement, however in 2014 government determined that their failure to timely file FBARs was willful, and assessed penalties of $247,030 against each spouse. Of course, they refused to pay. Then the district court’s conclusion was against the Horowitzes for the total amount of $981,852. The Horowitzes appealed to the Fourth Circuit, that affirmed the district court’s judgement. THE FBAR RULES YOU HAVE TO KNOW: if you have bank accounts outside of US, and the total balance on all your foreign (NON US) bank accounts in any day of the taxable year was $10,000 or more, you have to informationally report those accounts. The penalty for not doing so might be either civil, or criminal, or even both. Willful failure to file a foreign bank account report is up to $250k or 5 years in jail, or both!


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