# Have FBAR penalties ever been collected outside the US?



## SamsonandD (Sep 20, 2018)

So I think I found one case of them being collected against a US citizen in Canada, but can't find anymore.
Will the US collect or does the tax treaties it has with other countries mean it doesn't try because it won't collect for them?


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## Bevdeforges (Nov 16, 2007)

As with many things, "it depends." I know the IRS caught up with Boris Johnson (in the UK) because it was well known that he had US citizenship when all the publicity came out about him selling his house for 4 million GBP or so. Don't know if they did anything about the FBAR side of things. But he renounced shortly after he paid up.
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

SamsonandD said:


> So I think I found one case of them being collected against a US citizen in Canada, but can't find anymore.
> Will the US collect or does the tax treaties it has with other countries mean it doesn't try because it won't collect for them?


The short answer is no.

The longer answer is there is no evidence that they have. A list of successful FBAR cases in the US shows them all have a domestic angle. 

Boris Johnson paid capital gains on his house sale, there's no suggestion that FBAR fines were tacked on as well. And he paid voluntarily, if he'd wanted to be stubborn (and wasn't a politician who also had US-source income from speaking fees and book royalties) they could never have collected.

Two cases of note in Canada:

Pomerantz: A dual citizen in Vancouver was hit with a million-dollar FBAR fine. He ignored it. The US tried to sue him in Seattle but he ignored the summons. Case apparently overturned recently.

Dewees: A US-only citizen who tried to come into compliance through OVDP and was hit with a $100k FBAR fine. Because he is not a Canadian citizen, it's actually possible for the US to request Canadian assistance in collection, under the tax treaty. However, FBAR penalties are considered "administrative fines" not taxes so Canada would not assist with those. The US instead hit him with a similar fine for failing to properly report his consulting business, which as tax-related did fall under the treaty. This the poor fool paid in order to appeal, and lost.


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## Bevdeforges (Nov 16, 2007)

Just to clarify a bit - those who might be at risk of FBAR penalties are those who, while they live outside the US still have substantial financial assets in the US or potentially someone who is receiving US Social Security benefits or other income from the US.

The IRS can (and does) seize US based financial assets of foreign based citizens. That's where the main risk lies.
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

Bevdeforges said:


> Just to clarify a bit - those who might be at risk of FBAR penalties are those who, while they live outside the US still have substantial financial assets in the US or potentially someone who is receiving US Social Security benefits or other income from the US.
> 
> The IRS can (and does) seize US based financial assets of foreign based citizens. That's where the main risk lies.
> Cheers,
> Bev


Indeed. And from the list of successful FBAR cases, those victims* with a foreign domicile appeared to have substantial US assets etc.

*They were probably bad and deserved it, but I couldn't think of a better word.


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