What is a FBAR Quiet Disclosure?
FBAR Quiet Disclosure: An FBAR quiet disclosure puts U.S. taxpayers at serious risk. The FBAR is a FinCEN form (114) that is used by U.S. persons who have foreign accounts, assets, or investments — and meet the threshold requirements for filing the form.
When a person has not filed the form, there are offshore disclosure procedures in place to assist with filing.
If a person opts for a Quiet Disclosure in lieu of voluntary disclosure (tax amnesty) the person files the current year FBAR (usually along with previously unfiled FBAR forms) without filing under one of the proper amnesty programs:
FBAR Quiet Disclosure Risks
By making a Quiet Disclosure of previously unfiled FBAR forms, you are taking a major risk.
The FBAR form is a deceptively dangerous offshore reporting form, due to the sheer magnitude of the penalties involved for late, incomplete or unfiled returns.
Making matters worse are the globs of bad information you will find online about offshore account penalties.
As you get lost in one rabbit hole after the next, you start to lose your nerve before realizing that most of the bad information is pereptuated by fear-mongers and inexperienced counsel trying to scare you into representation.
- Are you automatically going to jail for five years? No.
- Are you automatically getting hit with a 100% percent willful penalty? No.
- Are you going to lose your immigration status? No.
5 Reasons to Avoid FBAR Quiet Disclosures
There are many reasons why it is never good idea to make an FBAR Quiet Disclosure; here are 5 good reasons not to
You May Not Even Need an FBAR Quiet Disclosure to Avoid IRS Penalties:
Here’s an example: Felicia is from Spain. She has foreign accounts that are worth $1 million. She never reported them because she never knew she had to report them.
Although she lived in the United States for many years, in 2017 she traveled back to Spain to be with her mother, and spent 350-days in Spain.
Felicia may qualify for the Streamlined Foreign Offshore Procedures (see below), in which she can legally fix her prior mistakes — and all penalties or waived.
Once You Make an FBAR Quiet Disclosure, You Are Now FBAR Willful
FBAR Willful penalties are bad. The floor penalty (lowest that it goes) absent very mitigating circumstances, is $100,000 per year.
If you were non-willful like Felicia above, but then went ahead and knowingly filed an FBAR Quiet disclosure, you have now taken a benign situation, and potentially turned it into a willful or even criminal situation.
Willfulness in the civil FBAR penalty arena does not mean the taxpayer acted with intent.
Two common situations with reduced willfulness
You May be Criminally Investigated
The Internal Revenue Service created various programs to assist people who are out of FBAR compliance. This includes people who were willful.
In other words, even if you knew you were supposed to file but didn’t, there are legal means for you to get into compliance. But, if you sidestep these responsibilities and the IRS finds your Quiet Disclosure, they have let it be known that they will pounce on your finances.
You May Lose Immigration Status
This is not common, but something to consider: if you were non-willful, there is almost no chance of any major catastrophe with your status. Under the current administration it is probably a bit more tense than it would otherwise be, but still…losing immigration status is not common.
On the flip-side, if you knowingly commit fraud by submitting an FBAR quiet disclosure, you maybe setting yourself up for more serious complications when it comes time to renew or change your status.
You are Better off with Legal Offshore Tax Amnesty
At Golding and Golding, we are 100% dedicated to getting you safely FBAR compliant. There is no other firm on the planet that is more qualified to assist you.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
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:
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
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.