U.S. Citizens who have a financial interest in or signature authority over foreign bank accounts that hold an aggregate amount greater than $10,000 are required to report the accounts to the IRS each year by filing a Report of Foreign Bank and Financial Accounts (FBAR). Taxpayers must file the FBAR annually and the last day to timely file is at end of the day on June 30th of the year after the calendar year for which the accounts are being reported. The FBAR is not filed with your federal tax return.<\/p>\n\n\n\n
Taxpayers\nwho willfully file an FBAR late or not at all will be subject to high penalties\nfor willful FBAR violations. A taxpayer will be considered willful if there is\nevidence that filing the FBAR late or not at all was voluntary and intentional.\nEvidence must be shown by the government of the taxpayer knowing a reporting\nrequirement exists and consciously not filing the FBAR. The burden of proof is\nwith the government. <\/p>\n\n\n\n
The\npenalty incurred applies for all years not reported. For violations occurring\nafter October 22, 2004, a Taxpayer will be penalized the greater of $100,000 or\n50% of the balance in the account at the time of the violation. After May 12,\n2015, usually, the total penalty amount for all years is limited to 50% of the\nhighest aggregate balance of all unreported foreign accounts during the years\nunder examination. The date of violation is the date the examiner first\nrequests records. This means the penalty is calculated for the balance in the\naccount on the date the examiner first requests records. The actual amount of\npenalty is up to the discretion of the examiner and examiners may recommend a\npenalty amount depending on the circumstances. Willful violations may also\nresult in criminal penalties of a fine and up to five years of imprisonment.<\/p>\n\n\n\n
In our experience, the FBAR willful penalty is rare, however the high penalty warrants careful legal planning and avoidance. <\/p>\n\n\n\n
Taxpayers\nwho have foreign accounts or have been sent a violation for failure to file an\nFBAR should contact Patel Law Offices. Over the years, our office has\nsuccessfully assisted numerous taxpayers regarding their FBAR and tax\ncompliance issues.<\/p>\n","protected":false},"excerpt":{"rendered":"
U.S. Citizens who have a financial interest in or signature authority over foreign bank accounts that hold an aggregate amount greater than $10,000 are required to report the accounts to the IRS each year by filing a Report of Foreign Bank and Financial Accounts (FBAR). Taxpayers must file the FBAR annually and the last day […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3941","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=3941"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3941\/revisions"}],"predecessor-version":[{"id":3945,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3941\/revisions\/3945"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=3941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=3941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=3941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}