United States taxpayers who hold substantial financial investments outside of the country are required to file a Foreign Bank and Financial Accounts Report (FBAR) with their tax returns every year. If you are late in sending this form, you could avoid paying a penalty by following the delinquent FBAR submission procedures in Washington DC. A committed FBAR attorney could advise on how this can be accomplished.
The delinquent FBAR submission procedures are for taxpayers who have unfiled FBARs but do not need to go through a voluntary disclosure because they do not have risk to criminal exposure. They also do not need to go through the streamlined procedure disclosure because that is for taxpayers with previously unreported foreign accounts and income.
Someone who did not know they had a responsibility to file FBARs can utilize the delinquent FBAR process and not be subject to any penalties. They will be required to include a brief written narrative that explains why they were not willful in their late filing.
A tax attorney in DC could help with the delinquent FBAR submission procedure by advising on willfulness or non-willfulness of the taxpayer, determine what the current penalty exposure might be, and how to resolve compliance issues with lesser or no penalties.
Taxpayers who would benefit from this program are those who have reported all the foreign income on their U.S. tax returns, but they non-willfully did not file their FBARs.
They must not be under a civil or criminal investigation by the IRS and they cannot have been previously notified by the IRS about their delinquent FBARs. They will need to review the FBAR instructions, which can be confusing and lengthy, and include a statement explaining why their filing will be late.
The taxpayer will file the FBAR electronically through FinCEN, the Financial Crimes Enforcement Network, which is a part of the United States Department of the Treasury.
Civil penalties only go back six years, so it will not be necessary to file a delinquent FBAR older than that. To be safe, it is good to review the filing deadlines for each missed year. If a taxpayer in Washington DC meets the prerequisites of the delinquent FBAR submission procedures, then there will be no penalty for the late-filed FBAR.
The lack of a penalty differentiates the delinquent FBAR submission procedures from other disclosure options, which makes it much easier to get taxpayers into compliance. If a person were to file their delinquent FBARs on their own without following the specific instructions, they could potentially be hit with a $10,000 automatic penalty for each year they missed. For this reason, a tax lawyer should be consulted first.
Depending on the situation, the other option would be the streamlined disclosures if there is unreported foreign income. The delinquent FBAR submission procedures are for when there is no unreported foreign income.
The delinquent FBAR submission procedures in Washington DC must be done carefully to avoid large penalties. Reach out to a lawyer so you can discuss the best way to proceed into FBAR compliance.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Vienna, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.