FBAR FAQ - IRS Common Questions & Answers, Certified Tax Specialist (Golding & Golding)

FBAR FAQ – IRS Common Questions & Answers, Certified Tax Specialist (Golding & Golding)

FBAR FAQ – IRS Common Questions & Answers, Certified Tax Specialist

FBAR Frequently Asked Questions: Ever since the implementation of FATCA (Foreign Account Tax Compliance Act), FBAR (Report of Foreign Bank and Financial Accounts) reporting has become a major concern for U.S. Taxpayers with foreign accounts. As such, it is important to understand what the purpose of the FBAR is – along with the technicalities in preparing the form.

              

FBAR FAQs

Golding & Golding are highly-respected International Tax Lawyers and FBAR (Report of Foreign Bank and Financial Account) Lawyers who have worked with thousands of individuals and businesses with FBAR compliance related issues in accordance with IRS and DOT rules and regulations.

Watch Out for Fear Mongering

Many unscrupulous law firms, CPAs and Lawyer/CPAs are providing the public with misinformation about the FBAR form in order to try and scare them into retaining these firms for FBAR representation, only to be left in a worse position than when they started.

Sean M. Golding, JD, LL.M., EA – Certified Tax Law Specialist

Our Managing Partner, Sean M. Golding, JD, LLM, EA is the only Attorney nationwide who has earned the Certified Tax Law Specialist credential and specializes in IRS Offshore Voluntary Disclosure Matters.

In addition to earning the Certified Tax Law Certification, Sean also holds 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.) 

He is frequently called upon to lecture and write on issues involving IRS Offshore Voluntary Disclosure.

Out of more than 200,000 practicing attorneys in California, less than 400 attorneys have achieved this Certified Tax Law Specialist designation.

The exam is widely regarded as one of (if not) the hardest tax exam given in the United States for practicing Attorneys. It is a designation earned by less than 1% of attorneys.

*Click Here to Learn about how Attorneys falsely market their services as “specialists.”

The Most Common FBAR Filing FAQ

What is an FBAR Statement?

An FBAR statement is a Report of Foreign Bank and Financial Accounts form. It is electronically filed annually with the Department of the Treasury online. Before the current year, the FBAR form had to be filed no later than June 30th of the current tax year in order to report the accounts for the prior tax year (File in 2018 to report the 2017 Maximum Account Balances). The law has changed, and FBARs are due in April, with an automatic extension through the October filing extension date.

Is it more than $10,000 per account, or in Total?

An FBAR is required to be filed when a person or business (explained below) has an annual aggregate total of foreign accounts that exceeds $10,000 on any day throughout the year. It does not matter if all that money is in one account or if a person had 11 accounts with $1000.00 in each account.  Once your overseas foreign accounts exceed $10,000, it is now time to report all of the foreign accounts. 

You are required to report the maximum balance throughout the year. If you do not have the maximum balance available, you can mark the box that notes the Max balance is unavailable — or alternatively you can use the best value you have, and then note that information on the FBAR.

What if the Money is not mine?

Even if the money is not yours, but you have signature authority over the foreign account – you are required to report the account on the FBAR. This also includes accounts in which you are a joint account holder but the money is not yours – it still must be reported.

Who or What is a U.S. Taxpayer?

This question can get more and more complex depending on who you speak to and what the context of the question is. To that end, if you are either a U.S. citizen, Legal Permanent Resident, or Foreign National Subject to US tax such as a visa holder (if you meet the Substantial Presence Test), then you should most likely file the annual FBAR form.

*If you are unsure whether you should file the form or not, you should speak with an experienced International Tax Lawyer to evaluate your particular situation.

I Live Overseas, Does that Matter?

Unlike a FATCA Form 8938 — which is similar to the FBAR — the requirements for filing the FBAR do not change solely because you live overseas. In other words, if you still meet the requirements for having to file a tax return (even if you do not have to file a tax return because you did not meet the minimum threshold requirements for earning income sufficient to file a tax return) you still have to file the FBAR – no matter where you live.

I Relinquished my Green Card/Legal Permanent Residency 

Unfortunately, just because you relinquished your green card does not mean you are exempt from filing an FBAR. If you are considered a long-term resident of the United States and/or meet the substantial presence test you may still be responsible for filing an annual FBAR statement. 

*You should speak with an experienced FBAR lawyer to discuss this in more detail.

I did Not have to File a Tax Return?

This can also get confusing, but it is important to remember that the FBAR is not filed with your tax return. Rather, while your tax return is filed directly with the Internal Revenue Service (by mail or online), your FBAR is filed online electronically directly with the Department of Treasury. Even if you do not meet the threshold requirements for filing a tax return, if your annual foreign account balances exceed $10,000, you should still file the FBAR.

The Money in the Foreign Accounts is not Mine?

This is not unusual. It is very common in foreign countries to have children or other individuals with a Power of Attorney over another person’s account – even when the money does not belong to the POA holder. To that end, if a person’s name is on the account, they should still file an FBAR statement. There is a section of the FBAR reserved for individuals who have signatory authority or other type of authority on the account, but the money is not theirs.

I do not want to Report my Foreign Parents’ Name on the FBAR

We understand the importance of privacy. Generally, there are ways around reporting the information the FBAR where you disclose certain information but not all the requested information (while still being FBAR compliant). 

The Money is from an Inheritance

It is important to remember that the FBAR is a reporting form. In other words, the Department of Treasury wants to know whether you have the money overseas — so that the DOT can track it.  The source of the money is less important to the degree that the Department of Treasury does not really care whether you received it from an inheritance, whether you earned it overseas, or whether you have full access to that money at the current time – for FBAR purposes at least.  Rather, they just want to know where the money is being held in whose name is associated with the account.

Thus, even if the money was inherited, you are required to report the account information on the FBAR. If you fail to do so and get stuck in the IRS/DOT crosshairs as a result of the foreign financial institution reporting the account in accordance with FATCA, it will be much harder to explain the situation at that time versus simply filing the FBAR timely or entering into OVDP or the Streamlined Program.

**That does not mean you should file a late FBAR without entering one of the approved programs (please see below).

My Accounts are in the name of a Foreign Corporation 

This is where the FBAR starts to get more complicated. The most important thing to remember is the concept of the FBAR is to promote financial transparency. Therefore, it does not really matter how you structure the business, if in the end the money is yours, then you should file the FBAR.

This can be distinguished from a company in which you are merely an employee and have signatory authority, which would require a comprehensive analysis of the business and your rights to the business and money before determining whether you should file.

My Name is not on the Company…But I “Own” The Company

We get it. You opened the company offshore using other people’s names. In other words, even though your name is not directly on the corporate documents or other documents required to form the business in the foreign jurisdiction of choice…the money is yours.

This is the type of situation in which you should speak with an experienced FBAR lawyer before taking any action. Why? Because while technically the money is not yours to the degree that your name is not on the company, if the IRS or US government was to pierce the corporate veil and learn of your ownership (whether in fact or implied) you may be looking at tax evasion and tax fraud charges.

Alternatively, by claiming interest or ownership of the account in which your name is not directly associated may also open a Pandora’s box. This is the type of situation which may be best remedied through an offshore disclosure program – which is why you should wait to take any action before speaking directly with an experienced offshore disclosure lawyer

My Accounts are in the name of a Foreign Holding Corporation

It does not matter that the accounts are in a Foreign Holding Corporation – this is not sufficient to avoid filing the FBAR statement. Otherwise, a US taxpayer could simply open a BVI Holding Corp and put the holding Corp. as the owner of the account and thus not to have the file the FBAR – even though all of the account money belongs to the US taxpayer – which is directly contradictory to the purpose of the FBAR.

If you are the “true owner” of the money, then filing the FBAR is technically required.

My Accounts are in the name of a Foreign PFIC Corporation

The same thing goes for a Passive Foreign Investment Company. Depending on which country you are in and how the country titles the foreign company, these companies come in all shapes and sizes. Back in the 80s, they were used primarily to avoid detection by the United States government of foreign account and asset information. There is no exception to filing an FBAR simply because you transferred your money into the PFIC. 

My Accounts are in the name of a Foreign Trust

As you can imagine, foreign trusts are not immune from having to file an FBAR statement either – in addition to possibly having to file a 3520 and 3520A. Whether the purpose of the foreign trust was “harmless,” and/or you thought you could avoid U.S. detection or possibly to form the foreign credit shelter trust or foreign asset protection, a foreign trust does will not negate your requirement to file an FBAR. If the accounts are in a foreign trust, in which you are the owner of the foreign trust then you have to report the account on the FBAR.

What Types of Accounts must be Reported on an FBAR?

Essentially, any account that is maintained at a foreign financial institution must be reported on the FBAR – but this does not mean every income generating asset has to be included. Here’s an example: if you have a Foreign Bank Account at a Foreign Financial Institution it has to be reported on the FBAR. Conversely, if you have a foreign rental property that is earning foreign rental income, while the foreign rental income must be reported on your tax return, and the account in which the income that is generated is placed into must be reported (assuming you otherwise meet the FBAR filing requirements) —  the home itself does need not be reported on the FBAR.

Do I have to report my Life Insurance Policy?

This is another complex area of the FBAR. Essentially, if the life insurance policy (or life assurance policy as it is called in many countries) has a surrender value or sale value insofar as you could sell the policy on the open market – it should most likely be reported on the FBAR.

In situations like this where there is a reporting requirement, it is better to err on the side of caution.

Reporting on the FBAR vs. Paying Tax on the Money

This is a question we receive often, and so a distinction must be made. Just because you are reporting a foreign account on an FBAR does not mean there is a taxable event taking place. For example, the money may have been inherited, received as a gift and/or earned with income tax already having been paid on the earnings.

Thus, the key issue to remember with an FBAR is that the FBAR is a reporting requirement for you to update the Department of Treasury with your foreign accounts that you maintain overseas; it has nothing to do with whether there is a taxable event taking place.

Remember, the FBAR is a “Reporting” requirement for purposes of “Disclosure.”

I do not know my Maximum Account Value?

When you are reporting on the FBAR, you are supposed to provide the maximum value of the account balance for the year. Depending on which country you are in, and whether the account provides you statements (or if it is a passbook account) that information may not be readily available. When that information is not available, you may either click the box that reads maximum account balance unknown or you may also consider using the balance that you have available, and explaining why you cannot obtain the maximum value in the box provided on the first page of the FBAR.

Can If I file a Late FBAR Statement?

This is a very complex issue. Technically, you are not allowed to file a late FBAR statement. There is some exception for direct filings in situation where there is no unreported income. Other people submit a Quiet Disclosure (in which they secretly file prior FBARs and amended tax returns) which can result in extremely high fines and penalties.

The Internal Revenue Service a Department of Treasury are taking foreign account compliance very seriously and it is a major priority for the IRS. If you have not filed your FBAR statements, you have three main alternatives: Reasonable Cause Statement, Streamlined Disclosure, or OVDP (these are briefly discussed below)

Late FBAR Filings and a Reasonable Cause Statement

If you have not filed your FBAR timely, the first option is to submit the FBAR late accompanied by a Reasonable Cause Statement. The failure to file an FBAR can have extremely high penalties. Therefore, if you opt for the reasonable cause statement as opposed to one of the approved programs discussed below, then you are essentially submitting the account information and asking for forgiveness from the IRS for any penalty.

Two things to keep in mind his first, the IRS is not very sympathetic, and second, if the IRS disagrees with your reasoning — you have now disclosed all of your account information to the IRS with no protection from penalties or criminal investigation.

For more information about Reasonable Cause, please Click Here for a summary provided by Golding & Golding.

Late FBAR Filings and the Streamlined Program

Under the streamlined program, a person will amend their tax returns for three (3) years as well as file six (6) years of unreported past FBAR statements (assuming that they are a U.S. taxpayer for six years; if they have only been a US taxpayer for four (4) years they would only file four (4) years of past FBAR statements). This program is reserved for taxpayers who were non-willful (in other words, they were unaware of the requirement to file FBAR and report their foreign income).

For more information about the Streamlined Program, please Click Here for a summary provided by Golding & Golding.

Late FBAR Filings and OVDP

OVDP is the Offshore Voluntary Disclosure Program. It is a program designed for individuals, businesses and trusts that knowingly intentionally failed to report their foreign account information and foreign income earnings. The program requires the applicant to file eight (8) years of past FBAR statements along with eight years of original and/or amended tax returns.

For more information about OVDP, please click here for a summary provided by Golding & Golding.

Is the FBAR the same as an 8938 form?

No. While the forms are similar, they do have key differences. The 8938 (Statement of Specified Foreign Financial Assets) is filed with your tax return and has different threshold requirements (much higher than the $10,000+ for an FBAR), which will be dependent on whether the taxpayers are filing married filing jointly, married filing separate, single — as well as whether they reside in the United States or overseas.

Can I be Criminally Prosecuted for FBAR?

Yes.

The IRS has the absolute right to initiate a criminal investigation by assigning your matter one of the IRS special agents to pursue a full-fledged criminal investigation to determine whether you were willful in your failure to report your foreign accounts on an FBAR.

The reality is, the IRS does not always initiate a criminal prosecutions – in fact the chances of them doing so are relatively low. Out of the millions upon millions of violations each year, coupled by the millions of civil audits the IRS launches each year that may uncover an FBAR non-filing, the IRS only prosecutes anywhere from 3000 to 7000 criminal prosecutions each year.

That is not to say that the IRS does not pursue many more criminal investigations, but less than 10,000 each year will reach the point in which the IRS wants to prosecute an individual and place him or her in prison. Usually because the individual is forced to succumb to a pre-indictment resolution – even when they believe they were non-willful.

Offshore tax evasion enforcement is a major priority for the IRS. Each year, the IRS publishes a dirty dozen tax scam list for individuals to be cautious of, and offshore tax evasion is always in the top three spots on the list.

In fact, the U.S. Government has developed specific programs that are specifically designed to combat offshore tax evasion and tax fraud.

Swiss Bank Program

For example, in 2013 the government created the Swiss bank program, which as provided by the DOJ “The Swiss Bank Program, which was announced on August 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Terrorist Financing and Financial Crimes

As the policy development and outreach office for TFI, the Office of Terrorist Financing and Financial Crimes (TFFC) works across all elements of the national security community – including the law enforcement, regulatory, policy, diplomatic and intelligence communities – and with the private sector and foreign governments to identify and address the threats presented by all forms of illicit finance to the international financial system.

TFFC advances this mission by developing initiatives and strategies to deploy the full range of financial authorities to combat money laundering, terrorist financing, WMD proliferation, and other criminal and illicit activities both at home and abroad. These include not only systemic initiatives to enhance the transparency of the international financial system, but also threat-specific strategies and initiatives to apply and implement targeted financial measures to the full range of national security threats. Primary examples of these roles in advancing this mission is TFFC’s leadership of the U.S. Government delegation to the Financial Action Task Force, which has developed leading global standards for combating money laundering and terrorist financing and its role in specific efforts to counter threats like proliferation, terrorism and the deceptive financial practices of Iran.

Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments. 

FinCEN (Financial Crimes Enforcement Network)

This statute establishes FinCEN as a bureau within the Treasury Department and describes FinCEN’s duties and powers to include:

  • Maintaining a government-wide data access service with a range of financial transactions information
  • Analysis and dissemination of information in support of law enforcement investigatory professionals at the Federal, State, Local, and International levels
  • Determine emerging trends and methods in money laundering and other financial crimes
  • Serve as the Financial Intelligence Unit of the United States
  • Carry out other delegated regulatory responsibilities

**Authorities Delegated to FinCEN pursuant to TREASURY ORDER 180-01 

This Treasury Order describes FinCEN’s responsibilities to implement, administer, and enforce compliance with the authorities contained in what is commonly known as the “Bank Secrecy Act.”

What Tax Crimes Can I be Convicted of?

As provided by the IRS, Possible criminal charges related to tax matters include tax evasion (IRC § 7201), filing a false return (IRC § 7206(1)) and failure to file an income tax return (IRC § 7203). Willfully failing to file an FBAR and willfully filing a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322.  Additional possible criminal charges include conspiracy to defraud the government with respect to claims (18 U.S.C. § 286) and conspiracy to commit offense or to defraud the United States (18 U.S.C. § 371).

– A person convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000.

– A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000. Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.  

– A person convicted of conspiracy to defraud the government with respect to claims is subject to a prison term of up to not more than 10 years or a fine of up to $250,000.  

– A person convicted of conspiracy to commit offense or to defraud the United States is subject to a prison term of not more than five years and a fine of up to $250,000.

What are the Options to Reduce or Avoid FBAR Penalties?

In order to avoid severe FBAR penalties, the US government has created a program entitled IRS offshore voluntary disclosure.

Offshore Voluntary Disclosure Tax law is very complex. There are many aspects that go into any particular tax calculation, including the legal status, marital status, business status and residence status of the taxpayer.

We Specialize in Safely Disclosing Foreign Money

We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)

Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.

Examples of areas of tax we handle

Who Decides to Disclose Unreported Money?

What Types of Clients Do we Represent?

We represent Attorneys, CPAs, Doctors, Investors, Engineers, Business Owners, Entrepreneurs, Professors, Athletes, Actors, Entry-Level staff, Students, Former/Current IRS Agents and more.

You are not alone, and you are not the only one to find himself or herself in this situation.

Sean M. Golding, JD, LL.M., EA – Board Certified Tax Law Specialist

Our Managing Partner, Sean M. Golding, JD, LLM, EA  holds 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.)

He is frequently called upon to lecture and write on issues involving IRS Voluntary Disclosure.

*Recent cases we had to fix after taking over from less experienced counsel that flubbed the case can be found by Clicking Here (Case 1) and Clicking Here (Case 2).

*Click here to learn the benefits of retaining a Board Certified Tax Law Specialist with advanced tax credentials.

Less than 1% of Tax Attorneys Nationwide

Out of more than 200,000 practicing attorneys in California, less than 400 attorneys have achieved this Certified Tax Law Specialist designation.

The exam is widely regarded as one of (if not) the hardest tax exam given in the United States for practicing Attorneys. It is a designation earned by less than 1% of attorneys.

IRS Penalty List

The following is a list of potential IRS penalties for unreported and undisclosed foreign accounts and assets:

Failure to File

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty. The failure-to-file penalty is generally more than the failure-to-pay penalty.

The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

Failure to Pay

f you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty.

However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Civil Tax Fraud

If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.

A Penalty for failing to file FBARs

The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation. See 31 U.S.C. § 5321(a)(5). Non-willful violations that the IRS determines were not due to reasonable cause are subject to a $10,000 penalty per violation.

A Penalty for failing to file Form 8938

The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 3520

The penalty for failing to file each one of these information returns, or for filing an incomplete return, is the greater of $10,000 or 35 percent of the gross reportable amount, except for returns reporting gifts, where the penalty is five percent of the gift per month, up to a maximum penalty of 25 percent of the gift.

A Penalty for failing to file Form 3520-A

The penalty for failing to file each one of these information returns or for filing an incomplete return, is the greater of $10,000 or 5 percent of the gross value of trust assets determined to be owned by the United States person.

A Penalty for failing to file Form 5471

The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 5472

The penalty for failing to file each one of these information returns, or to keep certain records regarding reportable transactions, is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency.

A Penalty for failing to file Form 926

The penalty for failing to file each one of these information returns is ten percent of the value of the property transferred, up to a maximum of $100,000 per return, with no limit if the failure to report the transfer was intentional.

A Penalty for failing to file Form 8865

Penalties include $10,000 for failure to file each return, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return, and ten percent of the value of any transferred property that is not reported, subject to a $100,000 limit.

Fraud penalties imposed under IRC §§ 6651(f) or 6663

Where an underpayment of tax, or a failure to file a tax return, is due to fraud, the taxpayer is liable for penalties that, although calculated differently, essentially amount to 75 percent of the unpaid tax.

A Penalty for failing to file a tax return imposed under IRC § 6651(a)(1)

Generally, taxpayers are required to file income tax returns. If a taxpayer fails to do so, a penalty of 5 percent of the balance due, plus an additional 5 percent for each month or fraction thereof during which the failure continues may be imposed. The penalty shall not exceed 25 percent.

A Penalty for failing to pay the amount of tax shown on the return under IRC § 6651(a)(2)

If a taxpayer fails to pay the amount of tax shown on the return, he or she may be liable for a penalty of .5 percent of the amount of tax shown on the return, plus an additional .5 percent for each additional month or fraction thereof that the amount remains unpaid, not exceeding 25 percent.

An Accuracy-Related Penalty on underpayments imposed under IRC § 6662

Depending upon which component of the accuracy-related penalty is applicable, a taxpayer may be liable for a 20 percent or 40 percent penalty

Possible Criminal Charges related to tax matters include tax evasion (IRC § 7201)

Filing a false return (IRC § 7206(1)) and failure to file an income tax return (IRC § 7203). Willfully failing to file an FBAR and willfully filing a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322.  Additional possible criminal charges include conspiracy to defraud the government with respect to claims (18 U.S.C. § 286) and conspiracy to commit offense or to defraud the United States (18 U.S.C. § 371).

A person convicted of tax evasion

Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000. A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000. Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.  A person convicted of conspiracy to defraud the government with respect to claims is subject to a prison term of up to not more than 10 years or a fine of up to $250,000.  A person convicted of conspiracy to commit offense or to defraud the United States is subject to a prison term of not more than five years and a fine of up to $250,000.

What Should You Do?

Everyone makes mistakes. If at some point that you should have been reporting your foreign income, accounts, assets or investments the prudent and least costly (but most effective) method for getting compliance is through one of the approved IRS offshore voluntary disclosure program.

Be Careful of the IRS

With the introduction and enforcement of FATCA for both Civil and Criminal Penalties, renewed interest in the IRS issuing FBAR Penalties, crackdown on Cryptocurrency (and IRS joining J5), the termination of OVDP, and recent foreign bank settlements with the IRS…there are not many places left to hide.

4 Types of IRS Voluntary Disclosure Programs

There are typically four types of IRS Voluntary Disclosure programs, and they include:

Contact Us Today; Let us Help You.