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If you have foreign bank accounts or other foreign financial accounts and have not reported the account information and/or income to the United States, you have every right to worry about FBAR penalties.
The U.S. government has made international tax compliance an enforcement priority. The U.S. government is authorized to issue high fines and penalties against individuals and businesses that are out of FBAR compliance.
What is an FBAR?
An FBAR is a Report of Foreign Bank and Financial Account Form aka FinCEN 114 (Financial Crimes Enforcement).
Who Has to File an FBAR?
An FBAR must be filed by any U.S. person (a United States Citizen, Legal Permanent Resident/Green Card Holder or U.S. Visa Holder who meets the Substantial Presence Test).
The person must file an annual FBAR statement for each year in which the person has an annual aggregate total of more than $10,000 in foreign accounts. It does not matter if the money is in one account with $300,000 or 15 accounts with $1,000 in each account – you have to report all of the accounts.
It also does not matter if the money belongs to you or if you are merely a joint account holder with a foreign non-US person who owns all of the money — you have to file the form if you are an owner, joint account holder, or signatory on the account.
When do I Have to File the FBAR?
Starting in year 2017 (in order to report your 2016 account information) the U.S. Government has changed the filing date to April 15, 2017 (unless it falls on a holiday or weekend – or if you obtain an extension). In prior years, the due date was June 30th.
What if I Never Filed an FBAR Before?
If you have never filed an FBAR, then it is important that you speak with an experienced FBAR lawyer before making any submission to the IRS. That is because there are extensive fines and penalties that the IRS can issue against a person who is out of compliance, and there are approved methods for getting back into compliance.
Important Note: Do NOT just start filing FBARs without educating yourself on the potential consequences. If you attempt to circumvent the proper procedures and make a quiet disclosure (aka just start filing FBARs), it may result in significantly higher fines and penalties reaching 100% of the value of your foreign accounts.
Are There Any Other Documents I Need to File?
While the FBAR may be the most well-known form for reporting foreign accounts, there are several other forms you may have to file as well depending on what types of assets or investments you have overseas, including:
- FATCA Form 8938
- Foreign Gift 3520
- Foreign Trust 3520-A
- Foreign Business 5471
- Foreign Partnership 8865
- Passive Foreign Investment Company 8621
How Do I Get into FBAR Compliance?
The safest and most effective method of getting into compliance is by submitting to one of the IRS offshore voluntary disclosure programs.
At Golding & Golding, we represent hundreds of taxpayers each year in over 45 different countries and we limit our entire practice to IRS offshore voluntary disclosure.
Email us to schedule a Reduced Fee Telephone Consultation to speak with an attorney.
OVDP Lawyer Credentials
**Tax Law is a specialized area of law, and Offshore Disclosure is especially complex. Your FBAR Attorney should have:
- At least 15 years of experience as a practicing lawyer
- An advanced Master’s of Tax Law Degree (LL.M.); and
- Either a CPA or Enrolled Agent (EA) license.