Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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1/26/2006 Factors for Imposing FBAR Penalties Described in IRS Advisory
The IRS Chief Counsel’s Office, in technical advice posted on the IRS letter ruling website, provides administrative guidance on the imposition of penalties for failure to file a TDF 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). The advisory discusses the element of “willfulness” in penalties for failure to file FBARs, and the respective evidentiary burdens in civil and criminal cases. Four scenarios involving offshore credit card arrangements not associated, or not clearly associated, with bank accounts for deposits are described to delineate the boundary between when a penalty should be asserted and when one might not be asserted (and by implication when an FBAR may not need to be filed).  The Chief Counsel’s Advice will be the subject of an article in a forthcoming issue of the Monitor.

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