FBAR Investigations

FBAR Investigations

FBAR Investigations

FBAR Investigations: The IRS has significantly increased enforcement of FBAR Foreign Accounts Compliance, including assessing FBAR Penalties. Many years ago, before the introduction of FATCA (Foreign Account Tax Compliance Act), and the renewed interest in Foreign Bank and Financial Account Reporting, hiding money overseas was easy. While offshore banking is not per se illegal, the Internal Revenue Service has developed new and improved methods for investigating foreign accounts. And, since FBAR penalties are heavily enforced, it is important to be aware of how the IRS investigates you, what you need to do to be compliant — and what to do if you are out-of-compliance.

We will summarize the basics of FBAR Investigations.

How does the IRS Investigate FBAR?

The IRS has many tools at its disposal.

Here is an introduction to 5 methods the IRS uses to investigate FBAR Violations.

Bank FATCA Reporting

The U.S. Government has entered into FATCA (Foreign Account Tax Compliance Act) Agreements with more than 110 countries.

As a result, more than 300,000 FFI (Foreign Financial Institutions) are actively reporting U.S. Persons who own foreign accounts to the IRS.

The IRS can use this information to cross-reference taxpayer filings and determine if the person is offshore compliant.

Missing or Incorrect Form 8938

When a Taxpayer files a tax return, they may have a Form 8938 requirement.

Form 8938 is used by U.S. Persons (Individuals and Entities) who have assets or accounts abroad.

If the form is not file timely or accurately, it can lead to further scrutiny — which can lead to an FBAR investigation.

J-5

J-5 is a group of countries (including the U.S.) that are working together to crack down on offshore tax fraud.

Based on the information the IRS obtains from other countries on matters involving offshore, it can lead to an FBAR Audit, along with other international tax investigations.

IRS Audit

When a Taxpayer is under audit for non-compliance with any type of domestic or offshore matter, the IRS will issue an IDR.

An IDR is an information document request. Even if the audit is not focused on international tax related issues, the IDR will generally ask about unreported income and accounts.

This can lead to an expanded audit on issues involving FBAR and other offshore matters.

FBAR Audit

Sometimes, the IRS will know you have not reported the accounts properly on the FBAR, and then examine you byway of an FBAR Audit.

This is common when a 3rd party may have reported joint or signature authority accounts that included your name — but you did not report the FBAR as well.

Missed the FBAR Reporting Due Date?

When a person misses the FBAR deadline for reporting, then the FBAR is considered delinquent. 

A taxpayer cannot just go back and file a late FBAR. Rather, they are required to submit to one of the Voluntary Disclosure/Tax Amnesty Programs.

Otherwise, it may be considered a quiet disclosure, which may result in significant fines and penalties including tax fraud, willfulness penalties, and an IRS special agent investigation.

Our FBAR Lawyers Represent Clients Worldwide

Our FBAR Lawyer team specializes exclusively in international tax, and specifically IRS offshore disclosure and FBAR Investigations. 

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 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:

  • 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.


Schedule Your Confidential Reduced-Fee Initial Consultation with a Board-Certified Tax Attorney Specialist

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930 Roosevelt Avenue, Suite 321, Irvine, CA 92620

Meet the Partners

Sean M. Golding

Partner

Jenny Kay Golding

Partner