Filing FBAR and other disclosures of offshore accounts is simply an obligation that many Americans and American expats have become accustomed to satisfying. While the obligation can be complex and difficult to understand, many people do their best to maintain compliance. Unfortunately, the complex nature of the Report of Foreign Bank Account (FBAR) obligation means that it is relatively easy to make an honest mistake regarding reporting all or certain foreign accounts. For others, it is simply easy to forget to submit the filing by its due date, since it falls on an otherwise obscure date in June. Whatever the reason for FBAR noncompliance, penalties are harsh and can consume much of the account balance.
The Sacramento attorneys at NewPoint Law Group are dedicated to helping Americans and American expats holding foreign assets comply with their offshore disclosure duties. They help U.S. taxpayers living around the globe comply with the complicated and harsh U.S. Tax Code and other laws. To schedule a confidential FBAR compliance consultation, call NewPoint Law Group today at 1-800-358-0305 or contact us online.
How Was I Supposed to File FBAR?
The FBAR is a rather difficult obligation to satisfy for some taxpayers because it is only be found and filed through electronic means. This means that there is no way to send a traditional paper submission to satisfy FBAR. Therefore, in order to satisfy FBAR one must log on to FinCEN’s Bank Secrecy Act portal and download FinCEN form 114. The form can then be completed electronically and submitted via the web portal. The last day to make a timely submission was June 30, 2016. If you have not already filed an FBAR to satisfy this obligation and hold foreign accounts and assets, there is a reasonable likelihood that you have violated U.S. law and are subject to potentially harsh penalties.
What Penalties Can I Face for Not Filing FBAR?
Many people seem to think that the penalties for FBAR cannot be particularly burdensome because they didn’t intend to become non-compliant. They may claim that they put forth an effort to understand and satisfy their duty to file, but could not do so due to the level of complexity involved. Individuals who were simply absent-minded can also face rather harsh penalties.
Even an accidental act of noncompliance with FBAR can subject a taxpayer to huge penalties. In fact, for FBAR noncompliance where willfulness (a voluntary or intentional failure to satisfy a known legal duty) is not at issue, potential penalties can reach up to $10,000 for a single filing mistake. This penalty can be imposed for each and every year where an FBAR filing should have been completed, but was not. If the filing can be attributed to willfulness, the penalties escalate significantly and you may face additional charges, including obstruction or even tax evasion. A willful failure to file FBAR can be punished by a penalty that is the greater of $100,000 or 50% percent of the account balance. This penalty can also be imposed for each year where noncompliance exists.
What Can I Do to Fix FBAR?
If you have failed to file FBAR, engaging in one of the relief programs offered by the IRS is likely one of your best options to achieve compliance. Through Streamlined Disclosure and Offshore Voluntary Disclosure, taxpayers who have made mistakes regarding their FBAR filing obligation can fix their noncompliance. However, the programs are very different and suited for individuals in very different circumstances.
For instance, the Streamlined program is best utilized by individuals who have no concerns regarding willful behavior. Benefits of the program include less paperwork and reduced or eliminated offshore penalties. The Streamlined program requires the filer to certify non-willfulness, and does not provide the same types of protections that standard OVDP provides. Entering into the Streamlined program when you have real concerns about willfulness can actually exacerbate your problems. For some taxpayers, a standard OVDP filing is more appropriate. You may pay additional penalties under regular OVDP, but you will also receive the peace of mind delivered by the IRS’s presumption against prosecution. For a taxpayer who has carried criminal concerns for years, this type of relief is extremely welcome.
Work with a Strategic and Aggressive Roseville FBAR Attorney
If you have FBAR concerns, rest assured that your worries can be addressed in most situations. Our attorneys will approach your case carefully and methodically to present potential plans that are likely to achieve your goal. To schedule a confidential consultation, call us at 1-800-358-0305 or contact us online.