Very nice post on “Streamlined” compliance and the willfulness issue.

The Tax Wars Blog

“A will-o’-the-wisp is an atmospheric ghost-light seen… at night, especially over bogs, swamps or marshes. It resembles a flickering lamp and is said to recede if approached, drawing (sojourners) from the safe paths.”(Wilkipedia).  Most clients with unreported offshore accounts who contact me these days want to enter the new IRS Streamlined Filing Compliance Program and insist that their conduct was and is non-willful. They are moved by the lower 5% penalty for U.S. persons, much less severe than the OVDP 27.5% penalty or 50% penalty for those having accounts with banks on the DOJ’s under investigation list.   But, non-willfulness like the will-o-the-wisp is a fickle fire.  You may see it but IRS may not, for non-willfulness or willfulness to a great extent is in the eyes of the beholder.  There is significant uncertainty about how IRS and the courts will apply the willfulness element of FBAR civil violations. Two court…

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