IRS Giveth and DOJ Taketh Away: Recent Opinion Jeopardizes Retroactive FBAR Relief

By Hale Sheppard

Much confusion has existed over the past few years about filing Form TD F 90-22.1 (“FBAR”) to report foreign accounts to the IRS.  To remedy this, the IRS issued pronouncements in 2009 and 2010 granting certain FBAR filing exemptions and penalty waivers.  Many of these benefits had retroactive effect.  A recent criminal case, United States v. Simon, calls into question the validity of the IRS pronouncements.  By holding that the U.S. Department of Justice may pursue criminal prosecutions in situations where the IRS publicly indicated that it would not even assert civil penalties, this case creates a serious dilemma.  The attached article  analyzes this legal predicament and its impact on taxpayers and tax advisors.  The article is reprinted from January’s edition of the Journal of Taxation

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