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Missed Prior Year FBAR Filing (IRS Summary 2020)

Missed Prior Year FBAR Filing: IRS Foreign Account Amnesty 2020 (Golding & Golding)

Missed Prior Year FBAR Filing: IRS Foreign Account Amnesty 2020 (Golding & Golding)

Missed Prior Year FBAR Filing: When a U.S. person missed a prior year FBAR filing, they have many IRS options to available to resolve the issue. Otherwise, the filer may become subject to offshore Penalties for FBAR violations, in addition to various other penalties. The IRS has very strict deadlines when it comes to filing the FBAR. In 2017, the IRS updated the FBAR (FinCEN Form 114) due date to coincide with your tax return.  If a person misses the FBAR reporting due date, the IRS may issue fines and penalties. The penalties can range from the relative benign (warning letter) all the way up to willful civil and criminal penalties. These penalties may be reduced, avoided or abated with FBAR Amnesty, And, as of 2019, the FBAR is on automatic extension.

Missed Prior Year FBAR Filing

If you have missed a prior year FBAR filing (or multiple FBARs) you should consider your compliance options.The IRS has procedures for filers who miss the deadline for filing FBAR. The IRS has developed several Amnesty Programs. The programs allow U.S. Account Holder to use FBAR Filing procedures in order to file FBAR for previous years. The programs go by many names, including: FBAR Amnesty, Streamlined Filing, FATCA Amnesty, IRS Voluntary Disclosure, and IRS Tax Amnesty.

Penalties for Not Reporting Foreign Accounts?

Penalties can be broken down into 4 categories: 

  • Willful FBAR 
  • Non-Willful FBAR  
  • Civil FBAR  
  • Criminal FBAR 

Golding & Golding is an International Tax Law Firm. Our Team is led by a Board Certified Tax Lawyer Specialist, and our FBAR Lawyers have worked with thousands of clients.

Civil Foreign Account Violations

Not all FBAR Penalties are the same. Sometimes, the IRS penalties for unfiled or untimely 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 FBAR Penalties 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).

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 citationCivil Monetary Penalty DescriptionCurrent 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 TransactionGreater 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

Fines for Civil FBAR can be Broken down into two (2) categories:

  • Willful FBAR Penalties
  • Non-Willful FBAR Penalties

Criminal Foreign Account Violations

Criminal FBAR Violations 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 citationCriminal Violation & DescriptionCriminal Penalty
31 C.F.R. §103.59(b) Willful – Failure to File FBAR or retain records of accountUp 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 lawsUp 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 StatutesSee Statutes

A few important considerations:

Common Q&A About Missing Prior FBAR Filings

Here are some more of the common questions we receive about FBAR Penalties.

Are there Penalties for Missing the FBAR Filing Date?

Technically, there is no “missed filing penalty.’ Rather, the IRS can penalize you for not filing the FBAR at the time it is due. In other words, unless you submit using one of the programs. Each program has its own associated FBAR penalty structure or waiver.

How does Foreign Account Penalty Collection Work?

Generally, the IRS will issue the FBAR penalty or penalties against you. Then, the IRS will give you a certain amount of time to pay, before the IRS sues you, to reduce the FBAR penalty to a civil judgment.

Is there an Amended FBAR Penalty?

Technically, no. Rather, once the FBAR is not filed timely, the FBAR Penalty kicks in, and it is up to you to try to limit the penalties by using one of the approved amnesty or offshore disclosure methods.

Golding & Golding (Board-Certified Tax Lawyer Specialist)

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.

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 Streamlined Counsel?

How to Hire Experienced Streamlined Counsel?

How to Hire Experienced Offshore 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.

Golding and Golding, Board-Certified Tax Law Specialist

Golding and Golding, Board-Certified Tax Law Specialist

Golding & Golding: Our international tax lawyers practice exclusively in the area of IRS Offshore & Voluntary Disclosure. We represent clients in 70+ different countries. Managing Partner Sean M. Golding is a Board-Certified Tax Law Specialist Attorney (a designation earned by < 1% of attorneys nationwide.). He leads a full-service offshore disclosure & tax law firm. Sean and his team have represented thousands of clients nationwide & worldwide in all aspects of IRS offshore & voluntary disclosure and compliance during his 20-year career as an Attorney.

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.
Golding and Golding, Board-Certified Tax Law Specialist