Signing Tax Return Without Checking the Box and Failing to File FBARs Constitutes Willfulness as a Matter of Law, Fourth Circuit Holds

On October 20, 2020, the Fourth Circuit upheld the imposition of enhanced civil penalties on husband and wife taxpayers for their willful failure to file Reports of Foreign Bank and Financial Accounts (“FBARs”), despite any evidence that they were aware of the FBAR-filing requirement. In United States v. Horowitz, No. 19-1280, 2020 U.S. App. LEXIS 33074 (4th Cir. Oct. 20, 2020), the taxpayers failed to file FBARs for a multi-million dollar Swiss bank account for 20 years and never paid tax on the account’s interest income. In affirming the district court’s grant of summary judgment, the court stressed that the taxpayers discussed whether their Swiss bank account and the interest income from it were taxable with friends, but not their accountant; failed to inform their accountant of their account; had all mail related to the account held in Switzerland; and signed tax returns that did not disclose their account without fully reading or ensuring that the return was accurate.… Read More