Last week, the Internal Revenue Service released interim guidance (SBSE-04-0515-0025) on foreign bank account report…
IRS delinquent FBAR submission procedure
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 FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.
You must include “a statement explaining why you are filing the FBARs late”, which many people interpret as a “reasonable cause” excuse explanation. Taxpayers are warned to carefully craft the statement to persuasively demonstrate reasonable cause.
In such case, many longstanding authorities regarding what constitutes reasonable cause continue to apply, and existing procedures concerning establishing reasonable cause, including requirements to provide a statement of facts made under the penalties of perjury, continue to apply. See, for example, Treas. Reg. § 1.6038-2(k)(3), Treas. Reg. § 1.6038A-4(b), and Treas. Reg. § 301.6679-1(a)(3).
Taxpayers may wish to seek legal counsel in filing the delinquent FBAR submission procedure.
Delinquent FBAR Submission Procedures
Taxpayers who do not need to use either the OVDP or the Streamlined Filing Compliance Procedures to file delinquent or amended tax returns to report and pay additional tax, but who:
- have not filed a required Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN Form 114, previously Form TD F 90-22.1),
- are not under a civil examination or a criminal investigation by the IRS, and
- have not already been contacted by the IRS about the delinquent FBARs
should file the delinquent FBARs according to the FBAR instructions.
Follow these steps to resolve delinquent FBARS
- Review the instructions
- Include a statement explaining why you are filing the FBARs late
- File all FBARs electronically at FinCEN
- On the cover page of the electronic form, select a reason for filing late
- If you are unable to file electronically, contact FinCEN’s Regulatory Help line at 1-800-949-2732 or 1-703-905-3975 (if calling from outside the United States) to determine possible alternatives to electronic filing.
The IRS will not impose a penalty for the failure to file the delinquent FBARs 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 FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.
FBARs will not be automatically subject to audit but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns.
http://www.irs.gov/Individuals/International-Taxpayers/Delinquent-FBAR-Submission-Procedures
Patel Law Offices offers a free strategy session to discuss how to resolve your legal problem. Conveniently schedule online today with our online scheduler and questionnaire.
Related Posts
- New IRS Guidelines for Willful FBAR violations
- Top FBAR Reporting Error
The most common FBAR reporting mistake is simply failing to file. Some U.S. persons continue…
- IRS Announces New Rules for FBAR Penalties
There are two types of penalties applicable to FinCEN Form 114 (Report of Foreign Bank…
Search
Categories
Recent Posts
- New Mandatory E-filing Form 8300 for Reporting of Large Cash Currency Transactions August 31, 2023
- IRS Uses New Funding to Target US Persons with Malta Accounts August 25, 2023
- NJ Contractor Charged with Criminal Tax Evasion for Unreported Checks August 18, 2023
- Beware the New 2023 Form 1099-K August 11, 2023
- IRS FBAR Penalties Are Now Unmitigated August 2, 2023
- IRS Targets Puerto Rican Residency Transactions July 21, 2023
- IRS Aggressively Starts New Criminal Investigations July 15, 2023
- Malta Pension Plan Being Investigated by IRS Criminal Investigation Division July 2, 2023
- National Taxpayer Advocate Fights for FTA Penalty Relief from the IRS June 28, 2023
- How to Avoid Employee Retention Credit (ERC) Scams June 21, 2023
- Watch Out: Malta Pension Plans Become Listed Transaction June 12, 2023
- Beware Expected Employee Retention Credit (ERC) Audits June 9, 2023