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Archive for FBAR

IRS Reminds Those With Foreign Assets About U.S. Tax Obligations

Tom Kerester, Tax Blog, Tax Ambassador, Washington D.C., USA, TaxConnections

WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

Deadline For Reporting Foreign Accounts Read more

FBAR Penalties Rise Again Due To Inflation

Ephraim Moss, Tax Advisor, Tax Blog, New York, USA, TaxConnections

As with many numbers in the U.S. tax code (for example, the foreign earned income exclusion maximum amount), FBAR penalties increase periodically due to inflation.

Recently, the IRS announced that FBAR penalties for noncompliance would be increased for penalties assessed after January 15, 2017. A brief summary of the FBAR requirement and the new penalty amounts are the subjects of this blog.

The FBAR Requirement – A Quick Background Read more

1st Taxpayer Victory In A “Willful” FBAR Penalty Case

Ronald Marini, Tax Advisor, Tax Blog, Miami, Florida, USA, TaxConnections

On September 20, 2017, the Eastern District of Pennsylvania issued an important taxpayer friendly opinion regarding the willfulnessstandard in FBAR penalty matters.

In Bedrosian v. United States, Case No. 2:15-cv-05853-MMB (E.D. Pa., Sept. 20, 2017), the court held that the government had not met its burden in proving that Bedrosian had willfully violated FBAR reporting requirements.

This opinion could have a major effect on future IRS decisions in the offshore compliance arena and may cause some taxpayers, to seek a more aggressive approach in addressing prior non-compliance. Read more

Options Available For U.S. Taxpayers With Undisclosed Foreign Financial Assets

IRS, FATCA, OVDP, FBAR, Department Of Justice, U.S. Tax, Undisclosed Foreign Financial Assets, Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.  Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

  1. Offshore Voluntary Disclosure Program;
    Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
  2. Streamlined Filing Compliance Procedures;
  3. Delinquent FBAR submission procedures; and
  4. Delinquent international information return submission procedures.

Read more

FBAR Must Be Filed Electronically Through FinCEN’s BSA E-Filing System, Not With The Federal Tax Return

Daniel Gray, Tax Advisor, Tax Blog, Toronto, Canada, TaxConnections

FBAR must be filed electronically through FinCEN’s BSA E-Filing System. The FBAR is not filed with a federal tax return.

Public Law 114-41 mandates a maximum six-month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required.

Thus, before the FBAR extended due date of October 15, file streamlined FBARs for each of the most recent 6 years for which the FBAR due date has passed (i.e., is delinquent, and of course timely file the current year FBAR too). Read more

Latest Podcast Guest: Tax Attorney John Richardson

Anthony Parent, Tax Advisor, Wallingford, USA, TaxConnections

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FBAR Reporting Requirement Or Exception – 4 Types Of Foreign Retirement Accounts

Daniel Gray, Tax Advisor, Toronto, Canada, TaxConnections

Foreign retirement accounts do not meet the FBAR filing exception for U.S. retirement accounts in 31 CFR 1010.350(g)(4).  That exception specifically applies to plans under sections of the Internal Revenue Code, that is, domestic U.S. plans.

FBAR reporting of foreign retirement accounts will be determined by the facts of each situation.  However, these general guidelines may be helpful in determining whether your foreign retirement account should be reported on the FBAR. Read more

Appeals Court Finally Affirms One Million Dollar FBAR Penalty

Ephraim Moss, Tax Attorney

In a rather swift and harsh judgment, the Ninth Circuit Court of Appeals affirmed a lower court’s decision in favor of the IRS, which assessed an approximately $1.2 million penalty against a taxpayer for failing to disclose her financial interests in an overseas account.

The decision, U.S. v. Bussell, is noteworthy for two reasons. First, it shows the magnitude of penalty that can be reached, even with respect to an individual and a single foreign account and tax year (in this case, the relevant tax year was 2006). Second, it shows the type of taxpayer arguments that courts will likely reject when reviewing an FBAR penalty case. Read more

What Can We Learn From Paul Manafort’s Tax Problems?

Clinton Donnelly, Tax Advisor

What will the IRS do with Paul Manafort if the special prosecutor’s allegations are true? On October 30, 2017, the special prosecutor released an indictment against Paul Manafort, former campaign manager for President Trump, related to his actions as an unregistered agent of the Ukraine government. The prosecutors allege that Manafort had opened 16 foreign companies and conspired to money launder over $18 million of payment through these companies.

Read more

Green Card Holder Pleads Guilty of Failing to File FBAR and Report UBS Account, Will Pay More than Half the Assets in FBAR and Tax Penalties

William Byrnes, Tax Advisor

A Greenwich, Connecticut man pleaded guilty October 26, 2017, to failing to report funds he maintained in foreign bank accounts to the Department of Treasury, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Chief Don Fort, IRS Criminal Investigation.

Read more

CPA Advice May Not Constitute Reasonable Cause

Taxpayers have been able to rely on advice from their accountants and CPAs to meet the complicated tax filing imposed by the U.S. Tax Code. But a case currently pending in the U.S. Court of Federal Claims suggests that CPA advice may not be enough to stop the IRS from assessing FBAR penalties for non-willful reporting violations.

A current case in the United States Court of Federal Claims, Jarnagin v United States, Docket No. 15-1534-T, shows what can happen when an unsuspecting taxpayer fails to file FBAR forms after providing all the requisite information regarding the foreign account to their accountant/CPA. Read more

U.S. Culture Of Penalty And Inflation

John Richardson

The purpose of this post is to explore how inflation results in the facilitation of enhanced penalty collection in America today.

What is inflation? “Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. Under conditions of inflation, the prices of things rise over time. Put differently, as inflation rises, every dollar you own buys a smaller percentage of a good or service. When prices rise, and alternatively when the value of money falls you have inflation.” Read more

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