Sunday, December 23, 2018

New Third Circuit Decision on Suits to Recover FBAR Penalties and on Expanded Meaning of Willfulness (11/23/18)

Tax Procedure Enthusiasts might be interested in this posting on my Federal Tax Crimes Blog:  Bedrosian on Appeal; Interesting and Potentially Important Opinion on Jurisdiction in FBAR Penalty Cases (Federal Tax Crimes Blog 12/21/18; 12/22/18), here.  I discuss Bedrosian v. United States, ___ F.3d ___, 2018 U.S. App. LEXIS 36146 (3rd Cir. 2018), here.

Quick summary with more detail in the linked blog:  In this case, the Third Circuit:

1. Discusses important jurisdictional issues with respect to a suit by a person imposed the FBAR penalties (there the willful penalty) to recover a partial payment of the penalty.  It has been conventional wisdom among practitioners is that the FBAR penalty recovery suit is not a suit to recover taxes and thus not subject to Flora's full payment requirement.  The Third Circuit opinion might cast doubt about that.

2. Discusses appellate venue in FBAR willful penalty recovery suits.

3. Raises at least the possibility that the refund suit predicate requirements (claim for refund and either denial or lapse of six months) may apply to FBAR penalty recovery suits.

4. Discusses the expanded meaning of FBAR willful penalty into reckless conduct.

Note to Federal Tax Procedure Blog readers, I generally discuss the FBAR penalties on the Federal Tax Crimes Blog, so look for more detail there.