offshore accounts

Do I Have to File an FBAR If I’m Not a U.S. Citizen?

April 11, 2017 | by Dennis N. Brager

The Bank Secrecy Act may require you to file a FinCEN 114, Report of Foreign Bank and Financial Accounts (FBAR), even if you are not a U.S. Citizen. The FBAR must be filed annually by all “United States Persons”, which includes U.S. citizens, U.S. residents, and certain entities. The FBAR must be filed if your total interest in foreign accounts exceeds $10,000 at any point during the calendar year.

FBAR Filing Requirements for Non-Citizens

The IRS has its own rules for determining if you are a resident for tax purposes. If you meet either the green card test or the substantial presence test, the IRS considers you a resident, and you must comply with all tax filing requirements, including filing an FBAR.

Streamlined Filing Procedures for Taxpayers Living Outside the United States

March 22, 2017 | by Dennis N. Brager

The IRS streamlined filing compliance procedures allow eligible taxpayers to avoid potentially disastrous penalties and resolve their offshore bank account problems. Taxpayers who have failed to file Foreign Bank Account Reports (FBARs) and report their income from foreign financial accounts on their tax returns can face penalties of up to $10,000 per violation for non-willful violations, and penalties of up to $250,000 and five years in prison for violations that are deemed willful; not to mention civil penalties of over $100,000 per violation, at a minimum.

The streamlined procedures can help taxpayers correct their past mistakes and avoid these penalties. There are different procedures, and different penalties for taxpayers that reside in the U.S. and taxpayers that live outside the U.S., but both types of taxpayers are eligible for this program.

Most importantly, these procedures are only available to taxpayers whose failure to file FBARs was non-willful. This means the conduct must have been due to negligence, inadvertence, mistake, or a good faith misunderstanding of the law. Taxpayers who have willfully failed to file FBARs may be eligible for the Offshore Voluntary Disclosure Program, which has some of the same benefits, but also involves much higher penalties.

Is It Time to Tell the IRS About Your Offshore Bank Accounts?

January 26, 2017 | by Dennis N. Brager

If you have an interest in an offshore bank account or another type of foreign financial account, you may be required to file a yearly report for the account with the Department of Treasury. The penalties for not filing Form FinCEN 114 are costly, and if you have been putting off disclosing your foreign bank accounts to the IRS, you should be aware of the risks you face by continuing to hide your offshore accounts.

Penalties for a Failure to File FBAR

There can be both criminal and civil penalties for failing to satisfy your Foreign Bank Account Reporting (FBAR) requirements. Criminal penalties can include up to 5 years in prison and a $250,000 fine. The willful failure to file FBAR is also a felony that can result in the loss of your right to vote, revocation of professional licenses for attorneys, doctors, and other professionals, and deportation of green card holders.