- 1 FBAR Deadline 2019
- 2 FBAR Penalty Structure
- 3 FBAR Civil Penalties
- 4 FBAR Criminal Penalties
- 5 What Happens if you File the FBAR Late?
- 6 What are the IRS Amnesty Programs for Filing Past FBAR?
- 7 Amnesty Programs for Foreign Accounts
- 8 How to Find Experienced & Reputable Offshore Voluntary Disclosure Counsel
- 9 Sean M. Golding, JD, LL.M., EA (Board Certified Tax Law Specialist)
- 10 Beware of Copycat Law Firms
- 11 How to Retain Experienced Counsel?
FBAR Deadline 2019 – When is the Last Day to Report your Accounts?
FBAR Deadline 2019: When is the Last Day to Report your Accounts? The FBAR Deadline 2019 is on automatic extension. In other words, the deadline to file the 2018 FBAR (in 2019) is the same day your tax returns are due, including extension. In addition, Taxpayers do not need to file any specific extension with the IRS or FinCEN (currently, subject to change) to request an extension — in other words, it is on FBAR Automatic Extension.
FBAR Deadline 2019
If you are the owner of foreign financial accounts, and you meet the threshold requirements for having to report the balances of these foreign accounts to the U.S. Government, you may have to file an FBAR. Therefore, it is important to know the deadline to file an FBAR.
Common Questions about the FBAR Filing Deadline:
- Is the FBAR part of my tax return?
- What if I did not file the FBAR previously?
- Are there penalties for not filing the FBAR?
- Can I just file past FBARs?
- What are the IRS Amnesty/Voluntary Disclosure Programs?
The FBAR is not the most difficult of international tax forms. It does not require accounting or bookkeeping skills. Essentially, you have to locate the accounts’ maximum balance – which can be difficult.
You have until October to File the FBAR
Depending on the type of account(s) you have, and whether the foreign financial institution provides the data may impact the time it takes you to complete the task.
But, the two main issues involving the FBARs deal with the penalties for non-filing — which can be tough.
The FBAR form is filed annually by any individual, entity, trust, etc. who has ownership, co-ownership or signature authority over foreign bank accounts and foreign financial accounts, which have an aggregate balance of more than $10,000 (USD) on any day of the year.
The deadline for filing the FBAR is the same as your tax return, April. Therefore, your 2018 FBAR is due by April 2019. And, if you applied for an extension, then the FBAR coincides with the filing date of the Tax Return.
The memorandum can be found here.
Is the FBAR Part of my Tax Return?
The FBAR is not part of your tax return. Rather, it is a separate form you can download from the FinCEN website. (In years past, it was submitted on paper with your tax returns; now it is submitted electronically through the FinCEN website.
What if I Did Not File the FBAR Previously?
If you did not file the FBAR previously, then you are out of compliance.
Penalties for Not Filing the FBAR?
Yes. Unfortunately, the penalties can be severe (but not always)
FBAR Penalty Structure
Not all FBAR Penalties are the same. Sometimes, the IRS penalties for unfiled or late FBARs are bad, and sometimes, well…they’re not so bad. You may even receive a Warning Letter in Lieu of Penalty. It jut depends on the different facts and circumstances of your situation
FBAR Penalties can be Civil or Criminal. They can then be broken down further, but the threshold question, is whether the IRS will get you for Civil (money) or Criminal (money, and worse).
FBAR Civil Penalties
Civil FBAR Penalties are limited to monetary penalties. A civil FBAR Penalty is a penalty that is focused on monetary fines or warning letters (waivers) — without any risk of criminal investigation or prosecution.
|U.S. Code citation||Civil Monetary Penalty Description||Current Maximum|
|31 U.S.C. 5321(a)(5)(B)(i)||Foreign Financial Agency Transaction – Non-Willful Violation of Transaction||$12,921|
|31 U.S.C. 5321(a)(5)(C)||Foreign Financial Agency Transaction – Willful Violation of Transaction||Greater of $129,210, or 50% of the amount per 31 U.S.C.5321(a)(5)(D)|
|31 U.S.C. 5321(a)(6)(A)||Negligent Violation by Financial Institution or Non-Financial Trade or Business||$1,118|
|31 U.S.C. 5321(a)(6)(B)||Pattern of Negligent Activity by Financial Institution or Non-Financial Trade or Business||$86,976|
Penalties for Civil FBAR can be Broken down into two (2) categories:
- Willful FBAR Penalties
- Non-Willful FBAR Penalties
Non-Willful FBAR Penalties
These FBAR Penalties are typically the least severe penalties. An FBAR non-willful penalty is a “lower-level” penalty for not filing the FBAR. The non-willful penalties can be high, BUT, typically they are not as high as willful penalties.
Willful FBAR Penalties and (Reduced) Willfulness
The Willful FBAR Penalty is typically more severe. An FBAR Willful Penalty is penalty for acting willful, willfully blind, or with reckless disregard in not filing the FBAR. We have provided detailed explanations and analyses in our free International Tax Law library about these different terms, and what they mean.
FBAR Criminal Penalties
Criminal FBAR Penalties may include monetary penalties and incarceration. This is when the IRS refers the matter to the Department of Justice (DOJ) or other 3 letter government faction for criminal investigation and possible prosecution. These are not very common, but unfortunately they are on the rise.
|U.S. Code citation||Criminal Violation & Description||Criminal Penalty|
|31 C.F.R. §103.59(b)||Willful – Failure to File FBAR or retain records of account||Up to $250,000 or 5 years or both|
|31 C.F.R. §103.59(c)||Willful – Failure to File FBAR or retain records of account while violating certain other laws||Up to $500,000 or 10 years or both|
|31 C.F.R. §103.59(c)||Knowingly and Willfully Filing False FBAR||$10,000 or 5 years or both|
|Civil and Criminal Penalties may be imposed together. 31 U.S.C. § 5321(d).||See Statutes||See Statutes|
A few important considerations:
- Most courts have held that the maximum annual FBAR willful penalty is not limited to $100,000.
- If the court believes you acted with Reckless Disregard, they can still penalize you full Willful FBAR Penalties.
- If the court believes you acted with Willful Blindness, they can still penalize you full Willful FBAR Penalties.
- Even in a non-willful setting, the court can issue $10,000 per account, per year penalty
What Happens if you File the FBAR Late?
No. If you just go back and file past FBARs without submitting to one of the approved Voluntary Disclosure/Amnesty Programs, you may be subject to the penalties listed above, along with other violations if you are willful — such as Tax Fraud and/or Tax Evasion.
What are the IRS Amnesty Programs for Filing Past FBAR?
If you are out of compliance, the penalties can be severe. Therefore, you may consider entering IRS offshore voluntary disclosure/tax amnesty, before it is too late.
Amnesty Programs for Foreign Accounts
There are 5 main versions of the program. In addition, there is an “illegal” version of Voluntary Disclosure as well, which is referred to as “Quiet Disclosure” or “Silent Disclosure.”
Here are the 5 Main Options:
(New) Updated Traditional IRS Voluntary Disclosure Program
When OVDP (Offshore Voluntary Disclosure Program) ended back in September 2018, the Internal Revenue Service was unclear as to whether a New “Offshore” Voluntary Disclosure Program would be introduced. Instead of a “new program,” the traditional voluntary disclosure program was expanded.
You can use the disclosure program to submit FBARs for your Foreign Bank Accounts, FATCA, PFIC, along with your Domestic Income
SFCP – IRS Streamlined Filing Compliance Procedures
IRS Streamlined Filing Compliance Procedures are a stand-alone “streamlined” version of the traditional OVDP. The “stand-alone” streamlined filing procedures were created in 2014 by the Internal Revenue Service.
The purpose of the procedures are to assist taxpayers who were noncompliant with offshore reporting requirements – but were also non-willful.
If the Taxpayer can certify under penalty of perjury of being non-willful, the IRS reduces the penalty structure, and even waives the penalty for applicants who qualify as foreign residents.
SDOP – IRS Streamlined Domestic Offshore Procedures
SDOP is the Streamlined Domestic Offshore Procedures, and it is the program designed for for U.S. persons residing in the United States (or do not meet the technical “Foreign Resident Test”)
SFOP – IRS Streamlined Foreign Offshore Procedures
SFOP is the Streamlined Foreign Offshore Procedures. These are the Procedures for U.S. persons residing outside the United States is referred to as the Streamlined Foreign Offshore Procedures.
DIRP – Delinquency Procedures for Offshore & Foreign Accounts and Assets
If you do not have any unreported income resulting in having to amend your tax returns — and all you have is unreported foreign assets, accounts or investments with no unreported income, you may be in luck. In these instances, in which you do not otherwise need to file for traditional offshore disclosure or the Streamlined Filing Compliance Procedures — you may qualify for the Delinquency Procedures and avoid any penalties.
RC – Reasonable Cause for Offshore & Foreign Accounts and Assets
Reasonable Cause may be an option for some taxpayers. Specifically, if you were completely non-willful in your failure to disclosure, and were unaware that there was any reporting requirement, then the thought of paying any penalty may sound absurd.
Fixing Lesser Experienced Law Firm mistakes.
IRS Voluntary Disclosure is complex enough for experienced practitioners who focus exclusively in the area of law, never mind relative newcomers who are trying to handle more than just offshore voluntary disclosure as part of their everyday tax practice.
We know, because those cases usually end up on our door-step.
How to Find Experienced & Reputable Offshore Voluntary Disclosure Counsel
Nearly all the experienced Attorneys in this field will have 5 Main Attributes:
- Board Certified Tax Law Specialist
- Master’s of Tax Law (aka LL.M.)
- Dually Licensed as an Enrolled Agent or CPA
- Around 20-Years of Private Practice experience
- Extensive Litigation, Trial and related high-stakes experience.
Sean M. Golding, JD, LL.M., EA (Board Certified Tax Law Specialist)
Our Managing Partner, Sean M. Golding, JD, LLM, EA earned an LL.M. (Master’s in Tax Law) from the University of Denver and is also an Enrolled Agent (the highest credential awarded by the IRS, and authorizes him to represent clients nationwide.)
Mr. Golding and his team have successfully handled several hundred IRS Offshore/Voluntary Disclosure Procedure cases. Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.
He is frequently called upon to lecture and write on issues involving IRS Voluntary Disclosure.
Less than 1% of Tax Attorneys Nationwide are Board Certified Tax Law Specialists
The Board Certified Tax Law Specialist exam is offered in many states, and is widely regarded as one of (if not) the hardest tax exam given in the United States for practicing Attorneys. Certification also requires the completion of significant ethics and experience requirements.
In California alone, out of more than 200,000 practicing attorneys (with thousands of attorneys practicing in some area of tax law), less than 350 attorneys are Board Certified Tax Law Specialists.
Beware of Copycat Law Firms
Unlike other attorneys who call themselves specialists or experts in Voluntary Disclosure but are not “Board Certified,” handle 5-10 different areas of tax law, purchase multiple keyword specific domain names, and even practice outside of tax, we are absolutely dedicated to Offshore Voluntary Disclosure.
How to Retain Experienced Counsel?
Our clients have asked up to prepare an Offshore Disclosure Attorney Fee Summary Guide for you to help separate fact from fiction when selecting an attorney.
Contact Us Today; Let us Help You.
Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver, and has also earned the prestigious Enrolled Agent credential. Mr. Golding is also a Board Certified Tax Law Specialist Attorney (A designation earned by Less than 1% of Attorneys nationwide.)