No longer are offshore financial accounts the tax havens they once were. Both the IRS and the Department of Justice are committed to seeking information regarding foreign holdings and accounts and enforcing reporting requirements for U.S. taxpayers on those funds. Whether you live in the U.S. or are an expatriate, it is important to comply with the law and file the Foreign Bank Accounts Report (FBAR) when necessary. It is always wise to discuss these requirements with an experienced international tax lawyer or FBAR tax attorney who can help ensure compliance.
FBAR Requirements and Possible Penalties
If you have more than $10,000 in non-U.S. accounts at any point during a tax year, you must file an FBAR by April 15th or file an extension. If you fail to do so, the IRS will likely assess hefty penalties for noncompliance. You can face up to $10,000 in civil penalties per undisclosed account even if you were unaware of your FBAR requirements and the IRS believes your noncompliance was non-willful. For alleged willful noncompliance, you could face criminal charges and penalties up to $100,000 per account or 50 percent of the undisclosed funds, whichever is greater.
If the IRS claims you failed to properly disclose offshore funds and assesses an FBAR penalty, you should contact SF Tax Counsel right away. As leading global tax attorneys, we have litigated FBAR cases to challenge penalties and defend against criminal tax charges. We also assist with the following:
- FBAR audits
- Internal Revenue Service Voluntary Disclosure Program (“OVDP”)
- Foreign Streamlined Compliance Procedures
- Domestic Streamlined Compliance Procedures
- Opt out OVDP procedures
- Other forms of voluntary disclosure