You didn’t file a timely FBAR or Form 8938…and now you’re freaking out after reading what usually turns out to be incorrect or inaccurate blog posts on what will happen to you next aka (5 Years Prison).
You are almost certainly not going to prison, and may not have any fines or penalties to contended with — assuming you properly comply.
It is Usually Not Your Fault
Maybe you had a CPA, EA, or Accountant who doesn’t understand International Tax. Or, possibly you gave it your best with TaxACT or TurboTax, but the instructions were unclear and ambiguous.
The IRS does not make international tax compliance easy. There is no course given to US taxpayers who have foreign accounts to best understand how to navigate the process.
Moreover, the IRS is authorized to fine and penalize you substantial fines and penalties, even if you acted “non-willfully,” which generally means no intent to defraud.
With that said, the two most important forms for most taxpayers in reporting foreign accounts is the FBAR (Report of Foreign Bank and Financial Accounts) and the IRS Form 8938 (Statement of Specific Foreign Assets).
Just Learned about FBARS…
FBARs (Report of Foreign Bank and Financial Accounts) were due to be filed by June 30 of each year — although, starting in 2017, the FBAR rules changes, so that you 2016 FBAR was due alongside your tax return (which is generally April 15th) – and every year going forward, unless the law changes again.
So what happens when you filed your tax return, the time to amend within the April/October due dates has passed, and you only recently learned about the FBAR or FATCA Form 8938?
Submitting Late FBAR and 8938 Forms
In order to avoid the seriously high penalties associated with untimely FBAR and 8938 filings, most taxpayers opt to submit to one of the offshore disclosure programs. For most people, if they are non-willful they may qualify for the Streamlined Program which has reduced paperwork requirements and a significantly reduced penalty. If you were willful, you may have to submit to the traditional IRS Offshore Voluntary Disclosure Program.
IRS Voluntary Disclosure of Offshore Accounts
Offshore Voluntary Disclosure Tax law is very complex.
Golding & Golding, A PLC
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.