U.S. Supreme Court Clarifies Application of FBAR Penalties

The U.S. Supreme Court recently resolved a split between the circuits over how non-willful foreign bank account report (FBAR) penalties should be applied (See Bittner v. United States).  The IRS clarified that these penalties should apply on a per-report basis, rather than a per-account basis.  It's important for clients to remember that the FBAR penalties are technically not a tax and, therefore, there is no amended return that can be filed for a refund.  Going forward, these penalties will be assessed on a per-report basis.  However, the IRS has yet to provide a procedure for clients to request a refund if past penalties were assessed on a per-account basis.  For more information on the FBAR penalty rules, visit Tax Facts Online.  Read More: Q .