Juliet L. Fink was quoted in a recent Law360 article entitled “International Tax Cases To Watch In The Second Half Of 2022,” published on July 15, 2022. The article details eight key international tax cases for tax practitioners to follow during the second half of 2022.
The article notes:
Similar to Liberty Global, FedEx has included APA arguments in its case that is seeking to invalidate final regulations Treasury issued in January 2019 for IRC Section 965 . The measure, part of the TCJA’s shift to a quasi-territorial system, required companies to pay a one-time transition tax to repatriate billions of dollars they had deferred offshore…While large corporations like FedEx can afford to challenge regulations, smaller companies and individual taxpayers have seen litigation as an uphill battle in the context of a monetary cost-benefit analysis, according to Juliet Fink of Kostelanetz & Fink LLP. However, if FedEx’s case is successful, other taxpayers may be more willing to challenge regulations, she said.
“As the courts continue to be more open-minded and perhaps cut the IRS down a little, practitioners will be letting taxpayers know, and taxpayers will be more willing to challenge the service,” Fink said.
Along with developments affecting major U.S. multinationals, practitioners will be following a case that could have a broad impact on individuals with foreign bank accounts now that the Supreme Court has decided to weigh in. The dispute centers on the $10,000 statutory maximum penalty for the nonwillful failure to file a foreign bank and financial account form, or FBAR, and whether the limit applies per annual form or for each bank account. The justices on June 21 decided to hear the dispute between Alexandru Bittner and the federal government, who disagree over the proper application of the $10,000 penalty, according to an order list…The Supreme Court’s decision to hear the case was unexpected but welcomed, according to Fink at Kostelanetz & Fink, who noted “there’s clear conflict within the way the courts are interpreting the penalty.”
It’s the Supreme Court’s job to unify the issue so that “a taxpayer doesn’t get one result in one area of the country and a different result in a different area of the country,” she said.
While the Bittner dispute involves penalties for the nonwillful failure to file FBARs, a separate case centers around the government’s bid to collect $8.8 million penalties for an individual’s allegedly willful failure to file. In denying summary judgment to the government, a New York federal judge in March concluded that it was for a jury to decide whether the account holder, Walter Schik, was “was willful rather than merely negligent” when he didn’t file a 2007 FBAR…Fink, who is one of the attorneys representing Schik, said the judge explicitly rejected the notion that even negligent behavior is willful. She said the judge found that willfulness must be more than negligence because “otherwise, it starts to lose its meaning.”
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