Victor Jaramillo Talks to Bloomberg Tax on Foreign Account Penalties

A variety of foreign bank account holders could see their IRS bills seriously impacted by how the Supreme Court rules in a case it agreed to hear over foreign account reporting penalties.

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Foreign account reporting penalties “are the Damocles sword hanging over every client with unreported accounts,” Victor Jaramillo, a Member at Caplin & Drysdale who focuses on tax issues, wrote in an email to Bloomberg Tax.

Jaramillo said that, while he has seen the IRS offer “a good number” of settlements applying penalties per year, practitioners have to advise clients that they could apply per account. He noted that some countries create a large number of sub-accounts under a main account.

“We have seen the IRS take the position that each sub-account is a reportable account,” he said.

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