If you were previously unaware of your obligation to file Foreign Bank Account Reports (FBARs), you have a strong argument that your conduct was non-willful, which could qualify you for reduced penalties under the Streamlined Filing Compliance Procedures. However, once you are aware of your obligations, you can no longer turn a blind eye to your unreported foreign accounts or you risk being considered a willful violator, subject to harsher penalties and disqualified from using the Streamlined Procedures.
Get an FBAR Attorney’s Opinion on Willfulness
If there was ever a situation where you should NOT attempt to handle a tax issue on your own, determining whether you willfully violated your foreign reporting requirements is it. The penalties for a willful FBAR violation may be the greater of $124,588 or 50 percent of the balance in the account at the time of the violation, for each violation. If you submit your amended returns under the Streamlined Procedures, but the IRS later decides that you were a willful FBAR violator, you could subject yourself to these penalties, along with the potential threat of criminal prosecution.