The Knight Watch: Can Green Card Treaty Tie-Breakers Avoid Filing FBARs (and Other International Information Returns)?
Tax attorneys Alan Granwell, James Dawson, Andrea Darling de Cortes and Joshua Odintz co-authored an article for Taxes – The Tax Magazine about a recent case involving a dispute over penalties arising from the non-filing of a Report of Foreign Bank and Financial Accounts (FBAR). In the case, a Magistrate Judge found that an individual who is a lawful permanent resident under U.S. tax law but a treaty resident under the tie-breaker provision of a bilateral income tax treaty is not required to file an FBAR because the individual is an income tax resident of the treaty country and not a "U.S. person" for FBAR filing purposes. The holding has raised questions for practitioners in the international tax community who deal with offshore disclosure and defense relating to FBARs filings. In this article, the attorneys explore whether the judge's ruling is tenable and what it could mean for taxpayers and counsel.