Does the statute of limitations for the FBAR penalty (both civil and criminal) toll if the taxpayer is outside the U.S.?I answered at least the criminal part of the question in a comment reply. I thought the question was worthy of a blog entry to expand the reply and alert readers who may not work their way to the comment and reply.
Suspension of the FBAR Criminal Penalty Statute of Limitations
Before I answer the question, I should first state why the question may be important. A U.S. person with a concern of criminal prosecution for FBAR violations may absent himself from the U.S. until the statute has run on the FBAR violations and thereby hope to avoid prosecution. That person, of course, would want to become compliant prospectively upon adopting the strategy, if it worked, so that, with enough time (5 years for FBAR prosecution), the risk of FBAR prosecution would go away.
With that background, I think the direct answer is that the FBAR criminal statute of limitations would be tolled (or suspended). 18 USC 3290, here, provides simply and cryptically "No statute of limitations shall extend to any person fleeing from justice." Title 18 is the general criminal code. The immediate question, of course, is whether § 3290 applies to crimes outside Title 18, such as the FBAR crime codified in Title 31. I have not researched the issue in great detail. But I did find a case where for an immigration crime (18 USC 1326, felony re-entry), the Second Circuit applied § 3290. United States v. Rivera-Ventura, 72 F.3d 277, 284 (2d Cir. 1995). Section 3290 requires that the person be "fleeing from justice" (whether inside or outside the U.S.). I suppose the question then is what this means. As I say in my Federal Tax Crimes book, the “majority rule” for § 3290 is that “intent to avoid arrest or prosecution must be proved” for § 3290's fugitive definition to apply; the minority rule is that mere absence from the jurisdiction, regardless of intent, is sufficient (I suppose just the objective fact of being absent from prosecution of justice is sufficient).
Now, even if there were no suspension of the statute under § 3290, absence from the U.S. is not a practical solution to the U.S. person with noncompliant legal source income who would be at risk of prosecution. That person would be subject to prosecution for tax crimes in Title 26 and tax-related crimes in Title 18, both of which have suspension provisions. The Title 18 tax related crimes would be subject to § 3290. And the Title 26 crimes (plus conspiracy related to tax crimes) are tolled while the defendant is outside the United States or a fugitive from justice within the meaning of 18 U.S.C. § 3290. See § 6531, here (flush language). Suspension is in the disjunctive. Merely being outside the U.S. suffices regardless of the purpose or effect of being outside the U.S. Thus, in the context of FBAR noncompliance with criminal risk related to tax noncompliance, one must assume that there is risk of criminal prosecution for the tax crimes, so that even escaping § 3290 (not likely) is not a sound strategy.
And, of course, the U.S. can always get a sealed indictment within any applicable statute of limitations permit the indictment to be unsealed and effective after the statute of limitations would otherwise have expired.
Suspension of the FBAR Civil Penalty Statute of Limitations
There is no suspension of the civil period of limitations for FBAR penalties. So, all persons with the civil risk can potentially outrun the risk by prospective compliance and winning the audit lottery by waiting six years since the last act of noncompliance. Keep in mind, of course, that as to the tax noncompliance, there can be longer statutes of limitations - for 25% omission of gross income and certain Form 8938 violations -- and an unlimited statute for civil fraud.