This article discusses the penalties for failing to file FBAR. FBAR is the most common form of reporting foreign financial assets to the U.S. Treasury Department. If you have a financial account outside the U.S. and meet the minimum balance requirement, you must file FBAR on or before that year’s the income tax filing deadline.
Understanding the FBAR Penalty
FBAR is regulated by the United States Department of the Treasury Financial Crimes Enforcement Network (FinCEN). At the same time, the Internal Revenue Service (IRS) has the delegated authority to enforce penalties on those who violate FBAR. FBAR penalties may vary widely depending on whether your failure to file the FBAR was willful or non-willful.
Willful failure to file FBAR means that you knew or reasonably should have known you were required to file an FBAR, but you chose not to do so. The penalty for a Willful failureis the higher of $100,000 or 50% of your bank account balance at the time of the violation, whichever is higher. Sometimes, willful failure to file an FBAR can also result in criminal charges.
Non-willful failure to file an FBAR means that you did not know or reasonably were not expected to know that you were required to file an FBAR. The penalty for non-willful failure can be $10,000 for every violation. If you are in a situation where you failed to file an FBAR either willingly or unwillingly, McMahon & Tivnan Tax Attorneys can help resolve the problem.
Why the need for the attorneys at McMahon & Tivnan, PC service?
If you are an American living abroad, you will likely have a financial account outside the U.S. However, you need to know that having financial assets in accounts outside of the U.S. might require special financial reporting. One of the primary IRS reporting obligations for foreign assets is FBAR. You must complete a FinCEN Form 114 on or before Tax Day.
Whenever you need assistance with filing FBAR to avoid the FBAR penalty, engage McMahon & Tivnan Tax Attorneys in Boston, MA. We work with businesses, individuals, and estates facing any tax disputes with federal governments and states. We have over 100 years of experience with appeals, audits, foreign transaction reporting, and litigation. Contact us today if you are looking for a successful way to file FBAR and avoid or minimize foreign account penalties. Our team of attorneys will ensure the best resolution possible for you.
How to Avoid FBAR Penalties
Whether you are U.S. based or an ex-pat, you must report your foreign accounts to the U.S. treasury department by the Tax Date or face a costly FBAR penalty. Take the following steps to fulfill FBAR filing requirements.
● Disclose your foreign holdings
● Ensure you file your FBAR on time
● Ensure you file FBAR digitally through the Financial Crimes Enforcement Network’s Report 114
FBAR Filing Requirements
Generally, you will be required to file an FBAR if you have a financial interest in or authority over a non-U.S. financial account. The filing obligation is triggered if the U.S. person at any point maintains an aggregate balance of $10,000 or more (from all non-U.S. financial accounts) during the year. To avoid an FBAR penalty, file your FBAR annually by April 15th, which can be extended. In addition, report any income made from your foreign accounts.
What if You Were Assessed FBAR Penalties?
If the IRS has already assessed FBAR penalties against you, getting those penalties minimized or removed as quickly as possible is paramount to avoid more complications. Typically, the U.S. government will take up to two years to bring a lawsuit to enforce your penalty. Unfortunately, the U.S. Tax Court is not an option for litigating the liability. As a substitute, you will have to duke it out with the U.S. government in either the Court of Federal Claims or Federal District District Court.
Why choose McMahon & Tivnan Tax Attorneys
If you are in Boston, MA, or other areas and are stuck with matters FBAR, do not hesitate to engage McMahon & Tivnan Tax Attorneys. We are a law firm in Boston, and we work with estates, individuals, and businesses facing tax differences with federal governments and states. We have a team of professional attorneys with over 100 years of experience in foreign transaction reporting, audits, appeals, and litigation. We will ensure the best resolution possible for you and ease your battle with the state tax agency or the Internal Revenue Service.
How to start service
McMahon & Tivnan Tax Attorneys have sufficient expertise to help you with FBAR penalty issues. To schedule your first consultation with us, call us today or fill out the contact form provided to get started. You will receive the highest legal representation for state and federal tax controversies. Whenever you have an issue with IRS, contact us, and we will be there for you.
Contact McMahon & Tivnan Tax Attorneys for FBAR Assistance Today
Failing to file FBAR can attract a costly FBAR penalty. If you are in Boston, MA, do not get stuck at any stage. McMahon & Tivnan Tax Attorneys provide sound and ethical, legal representation for businesses, individuals, and estates for all tax cases. We will help you with collections, audits, liens, examinations, seizures, litigation, voluntary disclosures, appeals, offers in compromise, whistleblower claims, etc. If the state or IRS has already issued you notice, contact us, and we will help you.