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Roseville FBAR Lawyers

A failure to file FBAR can result in significant penalties. People may have their reasons for failing to file, but after engaging in a careful analysis of FBAR, its enforcement mechanisms, and its penalties most people would find that whatever reason they have for not filing FBAR is insufficient. There are many reasons why people fail to file. Some may simply miss the deadline due to international travel or living abroad as an expat. Other people may be suspicious of turning over account data.

However, U.S. individuals holding foreign accounts in excess of the disclosure threshold must file FBAR and make the required disclosures. The IRS, DOJ, and other government agencies have invested significant amounts of resources, time, and training to improve their abilities to identify undisclosed foreign accounts held by Americans. More than 100 international information sharing agreements exist and other financial institutions have made extensive disclosures through the Swiss Bank Program. In all, individuals with undisclosed accounts face an high risk of detection followed by enforcement action.

When Must An Individual File FBAR?

Report of Foreign Bank and Financial Accounts (FBAR) is the name of the report that certain taxpayers must file to satisfy a provision of the Bank Secrecy Act (BSA). Under the BSA, U.S. taxpayers and U.S. persons must disclose foreign financial accounts that they hold or have signature authority over when the aggregate value of those accounts exceeds the reporting threshold. Currently, individuals holding foreign financial accounts including bank accounts, mutual funds, and brokerage accounts with an aggregate value in excess of $10,000 must make a timely disclosure. Even if the $10,000 reporting threshold is only momentarily exceeded, there is still an obligation to file FBAR.

What Penalties Can You Face for a Failure to Make an FBAR Disclosure?

Individuals who fail to file FBAR when they are required to do so can face penalties regardless of whether the failure was accidental or intentional. However, penalties are more severe for violations that are considered to be voluntary or intentional – willful in nature.

When the FBAR failure is attributed to an innocent mistake or error a fine of up to $10,000 can be imposed. Unfortunately, and subject to the statute of limitations, that fine can be imposed for every year where an FBAR filing was required but not made. Penalties are even more significant for willful violations. These types of violations can be punished by fines equal to the greater of $100,000 or 50 percent of the foreign account balance. Since the penalty for willful violations can also be imposed for multiple years, the fines are routinely significant amounts. Furthermore, if signs of fraud are present, the individual could be subject to criminal prosecution.

How Should One Satisfy an FBAR Obligation?

People with an obligation to make an FBAR disclosure can only satisfy the obligation by filing online. FinCEN Report 114 – Report of Foreign Bank and Financial Accounts – is available through the Bank Secrecy Act web portal. Individuals or their tax attorneys can download the form, provide information about foreign accounts, and submit the form online. Individuals must make accurate and comprehensive disclosures about all covered foreign accounts. The FBAR requires a significant amount of financial information. Working with an experienced attorney can reduce the likelihood of error or other complications when completing & filing the report.

OVDP Can Correct Past FBAR Disclosure Failures

If you believe you failed to file FBAR when you were required to do so or you think that you may have made mistakes or errors in a past filing, the experienced attorneys of the NewPoint Law Group, LLP, can help. Depending on your circumstances, we may recommend entry into Offshore Voluntary Disclosure Program (OVDP) or streamlined disclosure. The most appropriate program for an individual is based on their risk of criminal exposure and can only be determined after a careful analysis of the factors, circumstances, and behaviors present in the matter. Consider that while the streamlined program provides for lower fines, there is no protection from criminal prosecution. By contrast, OVDP has greater penalties but will provide individuals with peace of mind if there was a risk of facing criminal prosecution.

To schedule a free and confidential initial consultation with an experienced lawyer from the NewPoint Law Group, LLP, call 800-358-0305 or contact us online.

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