Bloomberg BNA Quotes Scott Michel on New FBAR Penalty Limits and Eighth Amendment Litigation
Caplin & Drysdale's Scott D. Michel spoke with Bloomberg BNA concerning new limitations on penalties the IRS will follow in most cases when taxpayers don't properly report their foreign bank accounts show the agency has concerns that some will argue in court that huge penalties are unconstitutional. For more on the story, please visit Bloomberg BNA's website (subscription required).
Excerpt taken from the article.
IRS guidance limiting the penalties examiners can assert for failure to file the Report of Foreign Bank and Financial Accounts "reflects some awareness and sensitivity about the constitutional issue presented by a multi-year FBAR penalty," Scott Michel, a member of Caplin & Drysdale, said June 4. "The notion that the government will exercise some administrative restraint is a good development."
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Michel said he believes because the limits are now more measured, it could lead to more FBAR penalty assessments, rather than fewer. "I wouldn't be surprised if, as a result of this guidance, you see more penalties being asserted and potentially litigated," he told Bloomberg BNA.
That said, "the guidance suggests a level of care and review in these cases which I think will be welcome," Michel said.