How to Submit Overdue FBARs if You Missed the Filing Date: Recently the IRS changed the FBAR Filing due date deadline to coincide with your tax return filing. The FBAR was previously due on June 30th. Now, the FBAR is typically due on the date your tax returns are due, including extension. And, the FBAR is on automatic extension (no forms need to be filed). But. if you miss the filing date and have to submit overdue FBARs, it is important you know which overdue FBAR procedures to follow, in order to avoid IRS fines and penalties for unreported offshore accounts, assets, and investments.
We can help.
How to Submit Overdue FBARs
Throughout your “Googling,” you will see the same terms over and over again, including words like “ Draconian” and in phrases such as “five years in prison.”
At Golding & Golding our entire International tax law practice focuses on IRS Offshore Voluntary Disclosure, with a large portion of it dedicated to FBAR and FATCA.
We have helped thousands of clients in our career and not a single client has been put in prison for FBAR non-compliance.
What is an FBAR Tax Amnesty Program?
The overdue FBAR Submission Procedures are a great option for non-willful taxpayers who do not have unreported income. There are various FBAR tax amnesty programs for clients who are overdue on FBAR Reporting, as well as overdue t for the reporting of other international reporting forms.
What are the Different Programs to Submit a Overdue FBAR
There are typically four types of IRS Voluntary Disclosure programs, for taxpayers to submit overdue FBARs.
- Traditional (IRM) IRS Voluntary Disclosure Program
- Streamlined Domestic Offshore Procedures (SDOP)
- Streamlined Foreign Offshore Procedures (SFOP)
- Reasonable Cause (RC)
How Far Back Do you File?
The statute of limitations for FBAR compliance is 6-yers. The concept of filing overdue FBARs has several moving parts. For example:
- Was there unreported income along with unreported accounts?
- Was the non-compliance willful or non-willful?
- Are the penalties civil, criminal — or both?
How to Prepare Overdue FBARs
We have a separate article designed to show you how to prepare the FBAR.
Are there Penalties for FBAR Non-Compliance?
Sometimes, but not always….
FBAR Penalties can be Civil FBAR Penalties or Criminal. Civil penalties involve financial penalties, while criminal penalties involve money and possible loss of freedom.
Let’s start with the most common FBAR penalties — civil FBAR 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:
Criminal FBAR 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.
Golding & Golding (Board-Certified)
We specialize exclusively in international tax, and specifically IRS offshore disclosure.
We have successfully represented clients in more than 1,000 streamlined and voluntary offshore disclosure submissions nationwide and in over 70-different countries. We have represented thousands of individuals and businesses with international tax problems.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
- Learn more about the Board-Certified Tax Lawyer Specialist credential
- Learn more about the Enrolled Agent credential
- Learn more about Golding & Golding’s Case Accomplishments
- Learn more about Golding & Golding Testimonials from prior clients
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants and Financial Professionals worldwide.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced FBAR Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.