Offshore Disclosure Compliance Alert: FBAR Filings Are Due June 30, 2016
While the obligation to file FBAR has existed for decades, strict enforcement for compliance failures is a relatively recent phenomenon. For taxpayers and American expatriates holding overseas assets, Report of Foreign Bank Accounts (FBAR), is unfortunately yet another disclosure obligation tat must be satisfied to avoid harsh penalties and other consequences. The failure to file FBAR can result in significant complications in one’s finances, and a need to engage in programs like Offshore Voluntary Disclosure or Streamlined Disclosure to correct the filing failures.
Ted Kleinman is an experienced CPA who handles international tax issues for American expats living abroad and U.S. taxpayers living at home but holding foreign assets. Ted can assist taxpayers to satisfy all tax filing, payment, and disclosure obligations ranging from accounting for tax minimization and avoiding double taxation on foreign income to FBAR and FATCA disclosures. To schedule a no-obligation consultation to discuss how Ted can assist you, contact U.S. Tax Help at (541) 923-0903 today or contact the firm online for a no-cost review of your situation.
FBAR Filing Deadline is Quickly Approaching
For taxpayers who have yet to file their annual FBAR disclosure, it is important to note that the deadline is quickly approaching. The deadline to file FBAR and disclose covered foreign accounts is June 30th. There is no extension of time available for FBAR filings. This means that if you are covered by FBAR and do not make your filing by the June 30, 2016, deadline that you are subject to potential penalties that can be imposed.
For FBAR obligations, even accidental noncompliance can result in significant penalties. Even merely forgetting to file FBAR can result in a penalty of up to $10,000. If the non-compliance occurred over a period of years, penalties can be applied for each year where the undisclosed account was out of compliance with the law. However, if the failure to file FBAR can be attributed to willfulness, penalties become even harsher. A failure to file FBAR due to an intentional or voluntary disregard of a known legal duty can result in a fine that is the larger of 50% of the account balance or $100,000. A willful disregard of an FBAR filing obligation can also be accompanied by other consequences and charges.
How Do I Comply with FBAR?
FBAR compliance can involve complex determinations regarding whether certain accounts are covered and whether an individual can claim certain disclosure exemptions. However, as a general rule, individuals holding or having signature authority over $10,000 or more in foreign accounts or foreign assets are required to make an FBAR disclosure.
No means are provided to make an FBAR disclosure via a paper filing. Rather, all FBAR filings are electronic and made through FinCEN’s Bank Secrecy Act portal. However, one should never mistake filing through electronic means as a sign that the disclosure is not serious or less formal. Failure to make a complete disclosure or making an incomplete disclosure can carry serious penalties.
FBAR is reported via FinCEN Form 114. The form requires the filer to make numerous disclosures and to provide an array of information. The form requires a taxpayer to provide information regarding the maximum value of a foreign account, the type of foreign account, the financial institution where the account is held, the account number, and information about the owner and any other joint holders of the account. The filer is also required to provide information regarding foreign accounts that he or she has no financial interest in. This includes information regarding the owner or beneficiary of the account.
Handle Your FBAR Disclosure Today Before You Fall Out of Compliance
For expats and other individuals holding foreign accounts and assets, filing before the deadline is an essential step in avoiding potentially serious problems. While it is possible to engage in streamlined procedure or Streamlined Compliance to correct filing failures, these programs can result in significant amounts of work and back filings to achieve compliance. Furthermore, in the case of streamlined procedure, significant penalties can still apply. Furthermore, if you are audited or come under investigation prior to engaging in these programs, they will be unavailable and you can theoretically face the full extent of fines and penalties.
CPA Ted Keienman of U.S. Tax Help can assist U.S. taxpayers with their FBAR disclosure obligations and US Taxes whether they are living at home or in a foreign nation like Brazil, India, or China. To discuss how Ted can help you maintain or achieve your FBAR disclosure compliance call contact U.S. Tax Help at (541) 923-0903 today or contact the firm online for a no-cost review of your situation.