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Supreme Court Foreign Account Penalties Case Holds Big Stakes

June 22, 2022, 8:45 AM

A variety of foreign bank account holders could see their IRS bills seriously impacted by how the Supreme Court rules in a case it agreed to hear over foreign account reporting penalties.

The question at issue—whether taxpayers are liable for a single $10,000 penalty for each year of non-willful reporting failure, or whether the penalty applies annually to each unreported account—has divided federal appeals courts. The US Court of Appeals for the Ninth Circuit said in March 2021 the penalties apply once per year, but the Fifth Circuit in November ruled they apply for each account that wasn’t reported.