IRS’s foreign account reporting rules again survive a legal challenge. In 2015, Sen. Rand Paul (R-KY) and several other individuals filed a lawsuit alleging that both the Foreign Account Tax Compliance Act and the reporting mandate imposed on U.S. owners of overseas financial accounts were unconstitutional. After a district court and an appeals court threw out the case on procedural grounds, the plaintiffs asked the Supreme Court for relief, but it has chosen not to step in. The penalty for willful failure to report a foreign bank account is steep… equal to the greater of $100,000 or 50% of the highest balance in the account. Meanwhile, the fine for a nonwillful reporting violation is much less, at $10,000. What is IRS’s burden of proof in showing that nonreporting is willful? A federal district court recently answered this question in a case in which IRS assessed a penalty against a man’s estate for his allegedly willful failure to timely report his interest in an overseas account. The estate argued that the agency must prove by clear and convincing evidence that his failure was willful. But the court says the lesser burden of preponderance of the evidence applies (Garrity, D.C., Conn.).