The US is one of the few countries that imposes tax on the worldwide income of its residents. US residents and US citizens living abroad are required to file a Report of Foreign Bank and Financial Account (FBARs) if the aggregate account balance of the accounts exceed $10,000. The Foreign Tax Compliance Act (FATCA) added the international information return filing requirement of Form 8938, Statement of Specified Foreign Financial Assets. Generally, the IRS can only audit a tax return for three years. However, the failure to file international information returns stops the statute of limitations until the international information returns are filed. Civil penalties start at $10,000 for each unfiled international form for each year. The typical international information returns are Forms 8938, 5471, 5472, 3520, 3520-A and 926. Willful failure to file international information returns can lead to criminal penalties. During audit examinations the IRS will ask the taxpayer if her or she has foreign accounts in search of unreported foreign income. If the IRS is auditing you, seek help from a Washington DC FBAR examination and offshore disclosure lawyer.

For non-filers, the IRS offers several offshore voluntary disclosure options for taxpayers to properly report their worldwide income and file their international information returns. The following options have different levels of protection, filing requirements and penalties.

  • The Streamlined Domestic Offshore Procedures are for taxpayers who non-willfully failed to report their foreign income and file FBARs. Taxpayers need to provide a detailed certification narrative explaining the non-willful conduct. The taxpayer is required to file three years of amended tax returns and six years of FBARs. In addition to paying the back taxes and related interest and penalties, a 5% offshore penalty will be based on the highest aggregate value of the foreign accounts.
  • The Streamlined Foreign Offshore Procedures contains the same provisions as the Streamlined Domestic Offshore Procedures with a few differences. These procedures are for taxpayers who live outside the US and there is no offshore penalty.
  • The Delinquent FBAR Submission Procedures are for taxpayers who timely reported and paid taxes on all foreign income and provide a statement why the FBARs were late filed. There are no penalties for these procedures.
  • Lastly, a Quiet Disclosure involves filing the amended tax returns and international information returns outside of the IRS disclosure options. This is a risky approach because the IRS could potentially impose civil penalties that are larger than provided in the other disclosure options.

Contact a Washington DC offshore disclosure lawyer for assistance.


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John helped us with a DC tax audit and succeeded in getting us a "no change" final decision. The issues were related to two flow-through entities and the use of carry-forward operating losses -- something that the DC auditors struggled to understand and with which they did not have any...
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Mr. Pontius is extremely professional and was able to take care of my tax returns which includes international bank accounts quickly and at a very reasonable price. Would definitely recommend.
I received a fee this past November from the IRS for over $800 because of an error I made on my 2016 taxes. I called my cousin, John Pontius, and he immediately knew what steps needed to be taken. Thanks to him, the fee was cleared. A 10 minute conversation...
As an American citizen living in the Middle East my local banker informed me that I needed to file FBARs and report my worldwide income to the IRS. Through the recommendation of another attorney at an international law firm, I was introduced to John Pontius. Mr. Pontius efficiently and effectively...
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John handled a difficult IRS lien for my client. He was excellent in getting the lien released so we could close on the property. I would highly recommend John .
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We were seeking tax advice with managing two properties, LLC, as well as some future financial planning. John responded to my call in a timely manner and was happy to answer our questions while referring us to specialists who can manage our accounts on a more regular basis.
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