Reporting Foreign Accounts:
Tax statues state that the penalty for failing to report foreign accounts is the greater of $100,000 or 50% of the highest balance in the accounts, but IRS regulations state that the penalty shall be no greater than $100,000. The eight district courts are divided with this inconsistency, with two indicating that the IRS is bound by the $100,000 cap in the regulations, and six agree that the statue takes precedence. However, a recent court ruling upheld a taxpayer who was fined $614,000 who willfully failed to disclose his account.
Passports and Owed Taxes:
The U.S. State Department may deny or revoke a U.S. passport for individuals with federal tax debts of more than $52,000 or who have a tax lien or levy filed on them. This does not apply to those who have an installment agreement, individuals in bankruptcy, people who live in a federally declared disaster area, or for those with a tax debt the IRS has determined is uncollectible because of hardship.