The Supreme Court has declined to review a taxpayer’s request to review her $2 million penalty assessed by the IRS. This case demonstrates the importance of FBAR reporting, which requires taxpayers to disclose foreign bank accounts if the highest aggregate balance through the tax year exceeds $10,000. Failure to do so might land you in the same place as the taxpayer. The maximum penalty for non-willful failures to disclose is $10,000 in relations to an FBAR. However, by contrast, failure to disclose as willful will result in the penalty to be equal to half of the balance, plus interest and late fees. With a balance of $4.2 million in a nondisclosed Swiss bank account, the taxpayer was ordered to pay $2 million in penalties.
