Third Circuit: Civil penalty assessment for FBAR violation requires “willful conduct”

December 21, 2018

The U.S. Court of Appeals for the Third Circuit today in a case of “first impression” held that to prove a “willful” FBAR violation, the government must satisfy the civil willfulness standard—requiring both knowing and reckless conduct.

The case concerns an assessment of civil penalties by the IRS for a taxpayer’s failure to file an FBAR (a report of “Foreign Bank and Financial Accounts”). The Third Circuit clarified that to prove a “willful” FBAR violation, the government must satisfy the civil willfulness standard. The Third Circuit remanded for a determination whether that standard was satisfied.

The Third Circuit also addressed and reserved on the issue whether a federal district court has jurisdiction when the taxpayer challenges an IRS assessment of civil FBAR penalties before fully paying the penalty.


The case is: Bedrosian v. United States, No. 17-2535 (3d Cir. December 21, 2018). Read the Third Circuit’s decision [PDF 292 KB]

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