In United States v. Kronowitz (S.D. Fla. No. 19-cv-62648 Findings of Fact and Conclusions of Law dated 6/3/21), CL here, the Court sustained the Government’s assertion of the FBAR civil willful penalty. The facts were bad for Kronowitz in trying to avoid the penalty. He was an accountant and regular tax return preparer over many years. He claimed inter alia (slip op. 11):
He admitted to seeing hundreds of Schedule Bs, and being familiar with the purpose of Schedule B and its requirements, but testified that he probably did not read the instructions because he was more concerned with providing for his family and taking care of his clients. Indeed, he testified that “my purpose in life at the time was to get clients, bill them, and collect the money, not spending the whole year reading[.]”
Well, he lost.
1. Another example of a taxpayer who certainly knew about the OVDP and for some reason chose not to timely join the program. (Of course, he did have some relationship to a UBS which could have meant that UBS turned his name over to the IRS early and thus was disqualified.
2. The Court found the taxpayer was sufficiently reckless that he met the standard for willful for the civil penalty. The Court said that Kronowitz’s defense was that he was not “willful or reckless.” As stated, Kronovitz’s argument was that willful and reckless are alternative bases for the penalty. That is not true. The statute imposes the penalty only on willful conduct which, for FBAR civil penalty purposes, is interpreted to include reckless conduct.