I’m a little slow in getting around to this one, but back on September 20, 2017, the Eastern District of Pennsylvania released a taxpayer-friendly opinion regarding the “willfulness” standard in FBAR penalty cases.

In Bedrosian v. United States, Case No. 2:15-cv-05853-MMB (E.D. Pa., Sept. 20, 2017), the district court held that the government had not met its burden of proof in establishing that Bedrosian willfully violated his FBAR-reporting requirements. As a result, the court ordered the government to refund to Bedrosian a sum of $ 9,757.89, the amount that he paid in partial satisfaction of his allegedly willful violation of Section 5314.

This opinion could have a ripple effect on the way the IRS reviews its offshore voluntary disclosure cases and may cause some taxpayers to rethink their strategy when it comes to deciding between the offshore voluntary disclosure program and the streamlined procedures. There is no blanket approach when it comes to addressing non-compliance vis-a-vis the FBAR and all cards should be left on the table before making a decision as important as this one.

Listen to my podcast where I deconstruct this case.