FBAR Lawyers: When a U.S. person has unreported foreign accounts, they may need an FBAR Attorney to represent them before the IRS or in Federal/Tax Court. Any lawyer can claim to be an attorney who specializes in FBAR — but there are only a handful of international tax lawyers across the globe who are Board-Certified Tax Law Specialists with advanced degrees and +20-years legal experience tax/law that specialize exclusively in offshore account and asset compliance. In the past 10-years, the IRS has significantly increased enforcement of offshore and foreign asset and account tax matters. When a U.S. person (includes more than just individuals) has more than $10,000 in annual aggregate total of foreign accounts on any given day of the year, they may have an FBAR filing requirement. If the account holder has not filed the FBAR timely, they may be subject to civil penalties and possibly criminal penalties — although the latter is rare. The only time a US Person may need an FBAR Attorney is when they have not filed FBARs in one or more previous years and want to submit to one of the Voluntary Disclosure or FBAR Amnesty Programs — or they have been issued a penalty notice.
We have an entire website dedicated to FBAR filing and compliance.
FBAR – What is it?
The FBAR is FinCEN Form 114. It was developed by FinCEN in 1970 but compliance is enforced by the IRS.
Who is Required to File the FBAR?
US Persons who meet the annual aggregate total threshold for filing may have an FBAR reporting requirement.
FinCEN defines a U.S. Person as:
- “United States Person. United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States. Note. The federal tax treatment of an entity does not determine whether the entity has an FBAR filing requirement.
What is the FBAR Filing Threshold?
The threshold kicks-in when a US Person has ownership, co-ownership or signature authority over foreign financial accounts that total more than $10,000 in annual aggregate total on any given day of the year (not +$10,000 per account, but in total between all accounts).
When is the FBAR Due Date?
The FBAR is due to be filed in April, to coincide with the due date for filing a tax return. FBAR filing is on automatic extension through October — so there is no additional requirement to file a separate extension form.
What Types of Accounts are Reported on the FBAR?
All types of bank and financial accounts are included. It includes account a US person has ownership (aka Financial Interest) or Signature Authority such as:
- Bank Accounts
- Investment Accounts
- Foreign Pension Accounts
- Life Insurance Policies
- Mutual Funds and other funds
What Happens if You Don’t File the FBAR Timely?
If you do not file, you may be subject fines and penalties.
Civil penalties can be broken down further into willful penalties and non-willful penalties. Criminal penalties are also possible — but again, not very common.
Can I Just Start Filing FBAR This Year Instead?
No, unless the current year is the first year you had an FBAR Reporting requirement.
If you had a prior year reporting requirement, but only begin to start filing in the current year (aka “filing forward”) it is illegal. In the world of offshore disclosure, this is referred to as an FBAR Quiet Disclosure.
The IRS has warned taxpayers that if they get caught in a FBAR Quiet Disclosure situation, it may lead to willful penalties and even a criminal investigation by the IRS Special Agents.
FBAR Amnesty Program
The FBAR Amnesty Programs are programs developed by the Internal Revenue Service to assist Taxpayers who are already out of compliance for non-reporting.
Some of the more common programs, include:
FBAR Lawyer Fees
Experienced Offshore counsel always charge flat-fees and not hourly fees for all matters before the IRS.
It avoids inexperienced counsel from puffing up your bill and charging you for nonsense services that should be bundled into a flat-fee service (tax and legal). Fees should only be determined after the Attorney has spoken in detail with the client — and not some prefabricated fee.
And, to protect the attorney-client privilege (and avoid a court rejecting Kovel), the full case (Tax and Legal) should be handled in-house. This will also help you avoid the “low up-front hourly retainer bait-and-switch“
International Tax Lawyer Specialist Team: Golding & Golding
Contact our firm today for assistance.
Schedule a Confidential Reduced-Fee Initial Consultation with a Board-Certified Tax Attorney Specialist
930 Roosevelt Avenue, Suite 321, Irvine, CA 92620