What is the Penalty for Not Filing FBAR? How To Minimize Risks
FBAR penalty law is tough. The IRS continue to strictly enforce the FBAR filing requirements and issuing both willful and non-willful FBAR penalties — for even small infractions which would have ordinarily received a waiver.
What is the Penalty for Not Filing FBAR?
FBAR Penalty: If a person is non-compliant, the IRS may issue significant FBAR penalties for the non-compliance with offshore reporting and disclosure requirements. In recent y
ears, the Internal Revenue Service has begun issuing much higher penalties than it did in year past, and has reduce the threshold (and enforcement requirements) to provide willfulness.
We will summarize some of the more relevant issues involving the FBAR Penalty:
If the FBAR is filed late, the IRS has the right to penalize you. It does not matter if it is a day late or several months late. But, currently (2019), the FBAR is on automatic 6-month extension.
There are several cases that deal with the FBAR penalty. Here is a link to a recent precedential decision on very important issues involving willfulness, lower threshold requirements, the outdated regulation, and more.
The IRS is authorized to reduce or even eliminate penalties in certain situations in which the filer (or non-filer) can show mitigation guidelines. The IRS relies on the IRM (Internal Revenue Manual) for mitigation guidelines.
Per Account (and Calculation)
In some situations, the IRS may issue a per account, per violation penalty for non-willful penalties. We summarize the rule and provide a simple example for your reference.
IRS (Internal Revenue Service)
Even though the FBAR (aka FinCEN Form 114) was developed by FinCEN (Financial Crimes Enforcement Network), ever since 2003, FinCEN delegated authority to the IRS to enforce (31 U.S.C. section 5314 and 5321)
Even if the IRS issues penalties, the IRS is also authorized to abate those penalties. Abatement procedures may be handled through the FBAR Amnesty voluntary disclosure procedures.
Another method for reducing or elimination an FBAR Penalty is by showing reasonable cause. Reasonable cause is an approved method for abatement penalties, and not having any other penalties issued against the filer.
Amnesty for FBAR Non-Compliance – Golding & Golding
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+.
Hiring 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.
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. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.