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Reporting Foreign Bank and Financial Accounts

2019 – 09/25 If a taxpayer has certain foreign financial accounts, he or she must report them on their tax returns. They may also have to file a “Report of Foreign Bank and Financial Accounts” (FBAR). In one case, a U.S. citizen resided in Mexico and had operated businesses there for decades. He failed to disclose a Swiss bank account or file FBARs. The IRS assessed penalties for willful violations and he filed a lawsuit to recover them, claiming his reporting failures were unintentional. A U.S. District Court disagreed and upheld the penalties. It found the man had “a detailed understanding of his personal and corporate tax obligations and how to avoid them.” (Flume, DC TX, 6/11/19)

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