FBAR Statute of Limitations: The FBAR statute of limitation rules are different than other IRS Tax enforcement rules. That is because the FBAR refers to U.S.C. title 31 (Anti-Money Laundering) and not title 26. FBAR reporting relates to offshore reporting of foreign account, asset, and investment value — not income. The IRS has taken an aggressive approach to foreign accounts compliance. Still, the IRS is limited in the time to assess and enforce the FBAR Statute. If you are out of compliance, you may consider submitting to one of FBAR Amnesty programs — collectively referred to as voluntary disclosure.
FBAR Statute of Limitations
Common Questions about FBAR Statute of Limitations include:
- What is an FBAR?
- When is the FBAR due?
- What is an FBAR Transaction?
- Can the IRS assess FBAR Penalties?
- How long can the IRS Asses FBAR penalties?
- When does the FBAR Statute expire?
- How can I avoid FBAR penalties?
This is due in part to the fact that FBAR is a FinCEN form, governed by Title 31 instead of Title 26.
FBAR Section 5321
Section 5321 is the basis for FBAR Penalties.
Time for Assessment & Commencement of Civil Actions
When it comes to FBAR penalties, there are two main aspects to it:
Assessment of the Penalty – The time the Secretary of Treasury has to actually assesses you have penalty for not properly filing the Form.
Civil Action: The time the Secretary has to commence the civil action against you, which is essentially filing the court case to enforce penalties that have been assessed, but not paid.
(1) Assessments.— The Secretary of the Treasury may assess a civil penalty under subsection (a) at any time before the end of the 6-year period beginning on the date of the transaction with respect to which the penalty is assessed.
(2) Civil actions.—The Secretary may commence a civil action to recover a civil penalty assessed under subsection (a) at any time before the end of the 2-year period beginning on the later of—
– the date the penalty was assessed; or
– the date any judgment becomes final in any criminal action under section 5322 in connection with the same transaction with respect to which the penalty is assessed.
What is a Transaction?
Unfortunately, the IRS has not pinned down specifically what the definition of a transaction is – but, it is generally considered as the time in which the filing is supposed to be made. In other words the time to assess is based on the date of the transaction and the date of the transaction would be the date of filing is due — so that the IRS has 6 Years from when the filing was due to assess penalties.
What Can You Do?
Like (almost) anything in life, it is better to put out the fire when it is small — before it becomes a blazing inferno.
The best thing you can do to avoid monstrous FBAR penalties is to safely get into compliance before the IRS finds you. The IRS has various programs available, which are referred to as amnesty programs or voluntary disclosure programs, which you can use to safely get into compliance.
Depending on the facts and circumstances of your situation, you may be able to minimize become a limit and even avoid penalties altogether.
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.
International Tax – Golding & Golding (Board-Certified Tax 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.
- 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+.
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.
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.