FBAR case and statute of limitations: Court win for taxpayers

The Foreign Bank Account Reporting Form (FBAR) is required for taxpayers that hold certain foreign accounts. The Internal Revenue Service (IRS) has pushed for compliance with reporting requirements in recent years. The agency has come down hard on those who fail to comply and has moved forward with investigations and penalties against those who violate these requirements. Penalties have included hefty fines and imprisonment.

But just how far back can the IRS investigate? That was the issue in a recent case decided by the Tax Court.

The issue involves whether or not the IRS can hold a taxpayer accountable after the three-year statute of limitations expires. In this case, a taxpayer received a notice of deficiency after the statute expired. Changes in the law have allowed for an extension of this statute to six years, but the changes were not enacted prior to 2010. As such, the court questioned whether or not it was appropriate to extend the IRS’ reach in this situation to the tax years in question, 2006 through 2008. Ultimately, the court held against the IRS. As a result, the taxpayer did not owe additional taxes.

A word of caution: It is important to note that every tax case is its own case. The results of the case noted above may not hold true for other tax payers. A piece in Accounting Today examined this specific case and noted that the IRS can still extend the statute if it can establish proper grounds such as fraud or a substantial understatement of income. 

No Comments

Leave a comment
Comment Information
  • ABA | American Bar Association
  • AV Preeminent | Peer Rated for Highest level of Professional Excellence | 2018
  • Virginia State Bar | 1938
  • Super lawyer | 2018
  • DC Bar
  • American Bar Academy of Attorney - CPAs | The power of the dual view
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Map & Directions

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Annapolis Office
888 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Map & Directions

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Map & Directions

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Map & Directions