What is an FBAR?
FBAR is an acronym that means Foreign Bank Account Report. It is a form that must be filed with the IRS using Form TDF 90-22.1.
When a United States citizen has a financial interest in, or a signature authority over, a foreign financial account they are legally required to file an FBAR provided that the value of all foreign financial accounts together goes over $10,000 at any point in the calendar year.
The IRS have recently stamped down hard on failure to file FBARs. There are heavy penalties on both the civil and criminal level for people who fail to file their FBAR. Now many people are trying to find an attorney to sort everything out.
Such a lawyer will be able to help you understand FBARs and whether you need to submit one to the IRS or not.
You should also invest in a tax attorney that has prior experience dealing with FBAR issues. They will be able to give you advice on how to voluntary disclose your assets and file an FBAR.
For example; if you were to file a voluntary disclosure through the offshore initiative, it is unlikely you will be subjected to criminal tax fraud prosecution. However, a voluntary disclosure practically guarantees the IRS will take a look at your case and decide whether or not you are liable to be penalized for an FBAR.
Most people are more interested in removing the possibility of going to jail for failure to file an FBAR. These people will opt to file through the offshore initiative.
There are also people who feel that the chances of being prosecuted for tax fraud or failing to file an FBAR are minimal. These people will not wish to participate in the offshore initiative program. They may choose to file a quiet voluntary disclosure instead.
The IRS has stated that they are on the lookout for people who filed quiet voluntary disclosures. It can be reasonably assumed that if someone has filed a quite voluntary disclosure, but is close to the criminal level of activity, that the IRS will come down hard on them and seek a conviction.
There are other people who feel have very minor, infractions that feel it would be best to just file an FBAR for the current year. They feel no need to go back and fix old FBAR problems. This may be an option for these people, but it requires good judgement. If the infraction is not really minor, these people have not safety net.
While the IRS may not have the resources to prosecute every person that violates tax laws, this will not provide you with much comfort if you are one of the people they are able to prosecute.
Wigg-Maxwell, Esq will design and defend the most tax efficient strategy for your business, estate and income tax matters.
We handle collection matters. Installment payment plans; Offers in Compromise; Innocent Spouse Relief; Non filers; Offshore Issues (FBAR; FATCA); Lien Removals; Levies; Collections Due Process Hearings.
As a tax attorney, we provide the protection of the attorney-client privilege. We can comfortably explore the full facts and provide you with a fully informed analysis of your exposure to civil or criminal tax penalties.
If you have an unreported offshore account schedule a complementary consultation at http://wiggmax.com/request-free-legal-case-consultation/ or call (973) 507-9760.