Shortly before the annual June 30 FBAR filing deadline, the IRS issued penalty guidance for those that miss the foreign bank account reporting deadline. The purpose of the new penalty guidance is to improve the IRS’s administration and application of FBAR penalties. The guidance is immediately effective for all open cases.
The IRS observes that statutory penalty guidance focuses on only the maximum penalties and the IRS is charged with discretion on when to apply a lower penalty. The guidance is intended to ensure consistency and effectiveness in the IRS’s application of these penalties and to help ensure FBAR penalty determinations are adequately supported and penalties are asserted in a fair and consistent manner. The guidance explains at what IRS level penalties are asserted and approved and includes a list of what information the IRS must include in its case file to support the penalties.