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In Mendu v. United States, the Court of Federal Claims held that penalties for failure to timely file a Report of Foreign Bank and Financial Accounts (FBAR), commonly known as “FBAR penalties,” were not subject to the Flora full payment rule, which requires a plaintiff to make payment of the full tax amount before they bring suit in the Court of Federal Claims or any US district court for the refund of any “internal-revenue tax.”

Tax equity financing transactions have become an increasingly popular way to provide a higher rate of return for outside investors and to help developers monetize an otherwise cost prohibitive project. In a recent Tax Court decision, Olsen v. Commissioner, T.C. Memo. 2021-41 (6 April 2021), the taxpayers invested in such a venture, but the result was a complete disallowance of all tax benefits because the investment was simply too good to be true and (according to the Department of Justice) a tax shelter. For individual taxpayers in particular, this case is an effective lesson on how not to structure investments in energy equipment transactions.

This week’s Government Enforcement video discussion, led by Baker McKenzie’s Tom Firestone and Jerome Tomas, will cover topics such as the Russian response to US sanctions, the trial of Mayor of Fall River, Massachusetts for extorting marijuana businesses, SEC Commissioner Peirce’s statement on an Index Fund SEC settlement, and the SEC and cyrpto assests.

On April 28, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule amending and reissuing the Somalia Sanctions Regulations, 31 C.F.R. Part 551 (“Regulations”) to further implement two existing Executive Orders, Executive Order 13536 of April 2010 and Executive Order 13620 of July 2012, and to replace the prior Somalia Sanctions Regulations that were published in May 2010 in abbreviated form.

Shelter-in-place or stay-at-home orders have been prevalent throughout the United States since March 2020 as state and local governments have sought to protect their citizens from the spread of the COVID-19 virus while at the same time reopen their economies in accordance with phased reopening plans. Keeping abreast of the evolving nature of these orders and plans as the spread of the virus continues to evolve is critical to the functioning of all businesses throughout the country.

On April 20, 2021, the Biden Administration took steps to address cybersecurity risks in the US energy sector industrial base by announcing a 100-day cybersecurity initiative for electricity subsector industrial control systems (“100-Day Plan”) and by issuing, on April 22, 2021, a Request for Information to inform future recommendations for US energy systems’ supply chain security (“RFI”).

The City of Chicago recently issued nexus guidance and a limited safe harbor for City tax purposes in light of the US Supreme Court’s pivotal South Dakota v. Wayfair ruling and the State of Illinois’ statutory economic nexus standards. True to form, the City implemented its new nexus standards by executive action via publication of a “nexus and safe harbor” “information bulletin” on its website, as opposed to the Chicago City Council more formally adopting a new ordinance.

On May 12, 2021, the US International Trade Commission (USITC) announced that it had issued a report recommending that the President make certain modifications to the Harmonized Tariff Schedule of the United States (HTS) to conform it with World Customs Organization (WCO) amendments to the global Harmonized System. The USITC’s report, Recommended Modifications in the Harmonized Tariff Schedule, 2021, Inv. No. 1205-13, USITC Publication 5171, March 2021, is available on the USITC web site.

Shelter-in-place or stay-at-home orders have been prevalent throughout the United States since March 2020 as state and local governments have sought to protect their citizens from the spread of the COVID-19 virus while at the same time reopen their economies in accordance with phased reopening plans. Keeping abreast of the evolving nature of these orders and plans as the spread of the virus continues to evolve is critical to the functioning of all businesses throughout the country.