Late FBAR Filing
Late FBAR Filing: When a U.S. Person has foreign accounts, they may have an annual FBAR (FinCEN Form 114) requirement to report the accounts to the IRS via FinCEN. If the accounts were not reported properly and timely, the account holder is considered delinquent. And, delinquent FBAR may result in significant IRS offshore penalties — but not always. To avoid these penalties, the Internal Revenue Service has developed various FBAR Amnesty Programs. There are various different programs, depending on a person’s specific facts and circumstances.
A ‘totality of the circumstance’ test is applied to see where the filer falls on the willful vs. non-willful spectrum.
Should You Hurry Up and File Late FBAR Immediately?
Not before you get your ducks in a row.
Inexperienced tax attorneys are all too quick to bait you in with a free initial consultation, and goad you into signing and submitting late FBAR before you are prepared.
Nothing is worse than submitting sloppy prepared late FBARs incorrectly.
Tips Before Filing Past Due FBAR
Here a few important tips form our International Tax Law specialist team.
We have prepared several thousands FBARs for clients worldwide in over 80 different countries:
Make Sure You are Required to File the FBAR
Not all foreign accounts are FBAR Reportable. I
n fact, oftentimes a person may believe they have an FBAR reporting requirement, either because they own stock certificates, and interest in a foreign business, and/or foreign real estate. Most of these items are (generally) not even reportable on the FBAR.
It depends on how the assets are being held and other factors.
Avoid Common FBAR Filing Mistakes
Inexperienced tax attorneys make common mistakes at the time of submission of a late FBAR, Streamlined, and offshore disclosure applications, which can be very detrimental to their clients.
Some common FBAR filing mistakes, include:
- Not Filing an FBAR for Minors
- Not preparing a +25. account spreadsheet at the outset
- Not understanding which accounts are reportable
- Failing to include estate and trust accounts
Understand How FBAR Penalties are Issued
Some Attorneys will play off your fear of FBAR Penalties.
Yes, you will see terms such as “Draconian penalties,” “imprisonment,” and 50% maximum value willful penalties at every turn of your research, but take it in stride.
Most of the time, FBAR penalties (if any) will be civil non-willful penalties and depending on your facts and circumstances you may be able to reduce, mitigate and even eliminate these penalties with a Penalty Waiver.
Learn the Different Amnesty Programs
The Internal Revenue Service has developed several FBAR Amnesty Programs to assist Taxpayers, just like you who, are already out of compliance for non-reporting.
Some of the more common programs, include:
- Voluntary Disclosure Program (VDP or “New” OVDP)
- Streamlined Domestic Offshore Procedures
- Streamlined Foreign Offshore Procedures
- Delinquency Procedures
- Reasonable Cause
Beware of Most Free Initial Consultations
Nothing in life is free.
We have lost count of the number of times a client comes to us with the same FBAR Reporting situation. The U.S. Person with foreign accounts learns about FBAR reporting for the first time. They do some digging on Google, only to get scared out of there wit about what is going to happen to them.
This is called FBAR fear mongering.
Next, the Taxpayer schedules a “free consultation” with an attorney that touts themselves as an expert. (Read: Tax Experts do not tout themselves as experts).
The attorney is not a Board-Certified Specialist in Tax, and they are definitely not experts. The firm plays into your fear and confirms that yes, you’ll be going to prison forever if you don’t file FBAR ASAP…
UNLESS you immediately sign with the firm and get the late FBARs filed before the IRS Special Agents come knocking on your door.
Unfortunately, when these clients come to us, they are usually in a worse situation than they would have otherwise been.
As with anything in life, signing up with the generalist tax firm for complicated FBAR matters off of a single free telephone call when you were unnecessarily scared and goaded into signing on immediately for representation — when you knew it just didn’t feel right — is not the way to go.
Learn how to protect yourself from online FBAR scare-mongers.
Our FBAR Lawyers Represent Clients Worldwide
Our FBAR Lawyer team 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 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.