Significant FBAR Penalties Upheld by Court

- By : P. Patel

Taxpayers have lost and the US Internal Revenue Service has scored a victory over the taxpayer in Kimble v USA, a court case concerning the reporting of foreign bank accounts. The taxpayer, Alice Kimble, held Swiss accounts at both HSBC and UBS in the early 2000s and was not aware until 2008 that she was required to report

Federal District Court Holds that FBAR Penalties in Excess of $100,000 is Unlawful

- By : P. Patel

Recently, the U.S. District Court for the Western District of Texas in U.S. v. Colliot, determined that an individual who repeatedly failed to timely file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, commonly referred to as an FBAR, could not be penalized in excess of the $100,000 regulatory maximum even though the relevant

New FBAR Court Case Makes it Easier for Taxpayers to be Deemed Willful

- By : P. Patel

There is a debate as to the “burden of proof” that must be met by the Internal Revenue Service (IRS) in asserting that an FBAR violation was “willful”.  This is significant because those who willfully fail to file the required FBAR on a timely basis, can be assessed a penalty of up to the greater

FBAR statute of limitations court case ruling

- By : P. Patel

In its first decision of 2018, the US Tax Court considered whether the six-year statute of limitations in Code Section 6501(e)(1)(A)(ii) applied to a taxpayer who failed to file Foreign Bank Account Reporting, or FBAR forms from 2006 through 2008. The court held that the Internal Revenue Service could not go back beyond the general

Some FBAR Deadlines Extended

- By : P. Patel

Last week the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) again extended the deadline for certain financial professionals to file foreign bank accounting reporting forms known as FBARs. In FinCEN Notice 2017-1, FinCEN announced a further extension of time for certain FBAR filings in light of proposed rules issued on March 10, 2016. Specifically, one of

New Court Case Limits the Reasonable cause exception to FBAR penalties

- By : P. Patel

Taxpayers across the country rely on advice from their accountants and CPAs to meet the complicated requirements of the U.S. Tax Code. But a new case, Jarnagin v United States, in the U.S. Court of Federal Claims suggests that CPA advice may not be enough to stop the IRS from assessing FBAR penalties for non-willful

The Misunderstood Extension of time to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)

- By : P. Patel

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced an automatic six-month extension for taxpayers required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Taxpayers now have until October 16 to submit their FBARs for 2016 without being subject to penalties. There is no specific FBAR extension document or form

IRS Issues Reminders for FBARs and other International Requirements

- By : P. Patel

The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account that a new deadline now applies to reports for these accounts,

2016 US Dept of Justice (DOJ) Tax Division: FBAR penalty collection cases

- By : P. Patel

The US Dept of Justice (DOJ) Tax Division  recently published it annual summary highlights of civil tax matters. The publication is linked here (Updated through December 16, 2016), and contains brief summaries DOJ Tax activity (decisions, court filings, etc.). Last year it appears that the government enforced collection of FBAR penalties has substantially increased.   Also surprising was

Permanent annual automatic extensions granted for FBARs to October 15

- By : P. Patel

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced last week that, to implement the new due date for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), of April 15 (April 18 for 2017), it will automatically grant all taxpayers filing the form a six-month extension every year to Oct. 15 (which

FBAR Reforms Recommended

- By : P. Patel

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a

NY Art Consultant Indicted for Filing False Tax Returns and Failing to File FBARs

- By : P. Patel

Last week, on July 28, 2016, the United States Department of Justice announced an indictment against Lacy Doyle for obstructing the administration of tax laws and filing false foreign bank account report (FBARs). Doyle was arrested in New York. In 2003, Ms. Doyle’s father died and left an inheritance of over $4 million to Doyle.

New FBAR Deadlines and Penalty Relief available

- By : P. Patel

The US Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the Act) has changed the filing date for the Report of Foreign Bank and Financial Accounts (FBAR), electronically filed with the Financial Crimes Enforcement Center (FinCEN) on Form 114, effective for reports for calendar year 2016 accounts due in 2017. The Act

Delinquent FinCen Form 114 (FBAR) Filings

- By : admin

Time is of the essence when dealing with a delinquent FinCen Form 114 (FBAR). A taxpayer who has not been already contacted by the government should immediately take steps to cure the noncompliance because the IRS has increased enforcement of the reporting of foreign (non-U.S.) financial accounts and their related incomes. Recent media articles surrounding penalty

New FBAR Deadline applies to 2016 Tax Year Onwards

- By : P. Patel

On July 31, 2015, President Obama signed into law P.L. 114-41, which included a number of tax provisions, one of which changes the deadline for filing the Report of Foreign Bank and Financial Accounts (FinCEN Form 114) (the FBAR) for 2016 and future years. The FBAR must be filed by a U.S. person (i.e., an individual

IRS delinquent FBAR submission procedure

- By : P. Patel

Last spring, the IRS revised its program for delinquent FBAR returns. The IRS offers a new “delinquent FBAR submission procedure”.  See below excerpt from the IRS website.The program is available if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent

Top FBAR Reporting Error

- By : P. Patel

The most common FBAR reporting mistake is simply failing to file. Some U.S. persons continue to deliberately conceal assets in secret offshore bank accounts in the hope of evading U.S. tax authorities. In many other cases, however, Americans living and working outside the U.S., recent immigrants, foreign citizens who are resident in the U.S., and

Correcting Common FBAR Errors

- By : P. Patel

The IRS offers four options to fix FBAR mistakes. Participation in the two formal disclosure programs is permitted only if the funds held in the foreign financial account(s) are from a legal source (and not the proceeds of an illegal activity) and if the IRS is not already in a position to know of the

New FBAR FIling Deadline Law Signed

- By : P. Patel

The president signed into law today legislation that modifies the due dates for several common tax returns.  These new due dates are generally ones that tax professionals have been advocating for several years to create a more logical flow of information and help taxpayers and tax professionals in filing timely and accurate tax returns. The

Top 4 Exceptions to FBAR Filing Requirement

- By : P. Patel

FBARs are due this week (again).  Below are the top 4 exceptions we often see for the FBAR filing requirement.  Certain Accounts Jointly Owned by Spouses – the spouse of an individual who files an FBAR is not required to file a separate FBAR if (1) all the financial accounts that the non-filing spouse is

Beware: IRS Reminds Taxpayers of FBAR Deadline

- By : P. Patel

Last week, the Internal Revenue Service reminded all taxpayers with a filing requirement for a foreign bank account report to report their foreign assets by the June 30 deadline.  The IRS has been targeting FBAR compliance over the last several years and has prosecuted numerous non-compliant taxpayers. FBAR filings have risen dramatically in recent years

New IRS Guidelines for Willful FBAR violations

- By : P. Patel

Last week, the Internal Revenue Service released interim guidance (SBSE-04-0515-0025) on foreign bank account report (FBAR) penalties to improve the administration of the FBAR compliance program. The guidance contains amendments to the Internal Revenue Manual (IRM), effective immediately, and applies to all open cases in which the FBAR penalties are at issue. Examiners are required to

New Much-Needed Guidance for Non-Willful FBAR violations

- By : P. Patel

Last week, the Internal Revenue Service released interim guidance (SBSE-04-0515-0025) on foreign bank account report (FBAR) (also known as FinCen 114) penalties to improve the administration of the FBAR compliance program. The guidance contains amendments to the Internal Revenue Manual (IRM), effective immediately, and applies to all open cases in which the FBAR penalties are at

Another Taxpayer Found Guilty of Failure to File FBARs and Report Foreign Income

- By : P. Patel

Raju Mukhi of St. Louis MO was indicted last year for his alleged failure to file a report to the IRS on his foreign financial accounts and for filing false tax returns. United States citizens are required to report income from foreign countries, such as bank account, securities and any other financial accounts on their

Helpful Non-willful FBAR penalty case decided by court

- By : P. Patel

For the first time, in the case of James Moore, Plaintiff v. United States of America, Defendant (James Moore v. U.S. Case 2:13-cv-02063-RAJ filed 4/1/15), we finally get a look at some non-willful FBAR penalty litigation. The US district court has essentially dismissed a taxpayer’s challenges to his penalty for failing to file FBARs (Report

FBAR Reporting Season is here

- By : P. Patel

All taxpayers are reminded about FBAR reporting this year, as the process has changed. If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account which exceeds certain thresholds, the Bank Secrecy Act may require

Argue for No Penalty and a Warning Letter for FBAR Violations

- By : P. Patel

The IRS may send a warning letter in lieu of asserting penalties for failure to file a Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts,” if it would be sufficient to bring the individual into compliance, an IRS official recently said. Jason Kuratnick, IRS associate area counsel (Philadelphia), Small Business/Self-Employed Division, explained

Comparison of Form 8938 and FBAR Requirements

- By : P. Patel

The new Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts). Individuals must file each form for which they meet the relevant reporting threshold.      Form 8938, Statement of Specified Foreign Financial Assets FinCEN Form 114, Report of

IRS Announces New Rules for FBAR Penalties

- By : P. Patel

There are two types of penalties applicable to FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts) (FBARs):  (1) Non-Willful and (2) Willful.  The penalties are theoretically assessed per account and not per FBAR; however, in practice, our firm has seen application on a per FBAR filing.  Additionally, the penalties are assessed for each

New FinCEN Form 114 (FBAR) Filing Rules Announced

- By : P. Patel

Responding to the needs of many filers who submit Reports of Foreign Bank and Financial Accounts (FBARs) jointly with spouses, or wish to submit them via third-party preparers, the Financial Crimes Enforcement Network (FinCEN) today introduced FinCEN Form 114(a), Record of Authorization to Electronically File FBARs. A copy of this form would be maintained by