ACertain citizens, residents, and entities in the United States are obligated to disclose their foreign financial interests through a Foreign Bank Account Report (FBAR). These interests include foreign bank accounts, brokerage accounts, mutual funds, and trusts, among others.
Unfortunately, some individuals fail to file simply because they were unaware of their obligation. Some who find out about the report prefer to wait until the Internal Revenue Service (IRS) calls them out, in fact. This lead to penalties, however. Understand what the FBAR entails, so you won’t run the risk of getting sanctioned.
Filing an FBAR
American citizens, residents, and entities (corporation, partnerships, etc.) need to file their FBAR if they have a financial interest in or signature authority over at least one foreign financial account. The combined value of the foreign accounts must exceed $10,000 at any point in the calendar year. If one is unsure if they’re required to file, they could go over the requirements with a legal counsel. Those who are filing an FBAR could refer to the IRS’s electronic filing instructions for more details.
Knowing the Penalties
A taxpayer who unintentionally failed to file an FBAR could face a penalty of up to $10,000 per violation. If the IRS deems the report willful withheld, however, the taxpayer could face a penalty of up to $100,000 or 50% of the total balance of the foreign account per violation. Bear in mind that penalties may differ from case to case, though. There might be details that could change the case, so one must consult an experienced lawyer about the particulars.
Seeking Legal Advice
Like any other legal case, filing an FBAR may have intricacies that an ordinary individual might miss. Concerned taxpayers should seek legal help. It would also be beneficial to hire a former IRS attorney familiar with the IRS process, especially for taxpayers who are under criminal investigation for failing to file. The legal counsel could help with navigating a criminal investigation and prosecution to avoid heavy sanctions.
Filing an FBAR might seem like a daunting task, but that doesn’t mean you can afford to keep putting it off indefinitely. Reach out to a lawyer you can trust and have them explain your situation to you. They should be able to give you sound legal advice over which avenues are available. A good legal counsel should be able toguide one through the unchartered territory without incident, after all.