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Archive for FBAR

13 Jun 2018

Sentencing Guidelines For A Taxpayer Charged with FBAR Violations

Do You Have Foreign Income?

In case you have foreign income or assets, you might be under an obligation to file a Report of Foreign Bank and Financial Accounts (FBAR) disclosing your assets and income to the IRS. The FBAR filing requirements specifically apply to US taxpayers with financial interest in, or signature authority over a financial account or foreign bank with a value of at least $10,000 at any point.

These FBAR requirements extend to U.S. residents, U.S. citizens and various kinds of business entities, such as limited liability companies (LLCs), corporations and partnerships. Keep in mind that FBAR violations, which usually involve failure to maintain relevant financial records or failure to file an FBAR, could result in severe penalties, especially if these violations are “willful.”

Failure To File

Since 2017, any failure to file can lead to harsh sentencing; this depends on how much you or your business has in foreign financial institutions or offshore accounts. A failure to disclose and furnish the information is usually an intentional act to deceive the IRS. You have to file the FBAR paperwork, as long as your accounts have over $10,000.

No comments | Tags: Detroit, FBAR Violations, IRS, Michigan, Tax Lawyer

24 May 2018

Written by Ephraim Moss | Posted in FBAR • FBAR Penalaty • Supreme Court

Supreme Court Refuses To Review Million Dollar FBAR Penatly

Despite the taxpayer’s persistent challenges, the Supreme Court has refused to review a Ninth Circuit Court of Appeals’ decision affirming a lower court’s decision in favor of the IRS, which assessed a giant $1.2 million penalty for failing to disclose financial interests in an overseas account.

The April 30th decision, which is now final, 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.

No comments | Tags: Ephraim Moss, FBAR, FBAR penalties, FBAR Penalty, Supreme Court, The Bussell Case

03 May 2018

Written by Ephraim Moss | Posted in FBAR

District Court Broadens Scope Of Willful Requirement In Applying Enhanced FBAR Penalities

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

A new U.S. District court case has added to the recent upswing in cases tackling the issue of defining “willful” for purposes of applying the more severe penalties for failure to file the FBAR.

In U.S. v. Garrity, 2018 U.S. Dist. LEXIS 56888 (D. Conn. 2018), a United States District Court of Connecticut judge ordered that in moving to the next phase of trial, the IRS must prove the elements of its FBAR penalty claim only by a preponderance of the evidence, and the IRS can satisfy its burden to prove willfulness by evidencing reckless conduct by the taxpayer. Read more

No comments | Tags: Ephraim Moss, FBAR, FBAR Penalty, New York, Tax Advisor, Tax Blog, TaxConnections, USA

13 Apr 2018

Written by IRS | Posted in FBAR • IRS • OVDP • TaxConnections

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

No comments | Tags: FBAR, foreign assets, IRS, OVDP, Resident Aliens, Tax Ambassador, Tax Blog, TaxConnections, tom kerester, USA, Washington D.C.

02 Apr 2018

Written by Ephraim Moss | Posted in FBAR • Foreign Earned Income Exclusion • Inflation • IRS • TaxConnections

FBAR Penalties Rise Again Due To Inflation

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

No comments | Tags: Ephraim Moss, FBAR, FBAR Penalty, FEIE, Foreign Earned Income Exclusion, Inflation, IRS, New York, Noncompliance, Tax Advisor, Tax Blog, TaxConnections, U.S. Tax Code, USA

15 Mar 2018

Written by Thomas Kerester | Posted in FATCA • FBAR • IRS • OVDP

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

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:

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.
Streamlined Filing Compliance Procedures;
Delinquent FBAR submission procedures; and
Delinquent international information return submission procedures.

No comments | Tags: Department of Justice, FATCA, FBAR, IRS, OVDP, Tax Ambassador, Tax Blog, TaxConnections, tom kerester, U.S. tax, Undisclosed Foreign Financial Assets, USA, Washington D.C.

02 Mar 2018

Written by Daniel Gray | Posted in Canada • FBAR • Federal • Tax Return

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

2 comments | Tags: Canada, Canada tax, Daniel Gray, FBAR, Federal Tax Return, Tax Advisor, Tax Blog, tax return, TaxConnections, Toronto

24 Jan 2018

Written by Daniel Gray | Posted in FBAR • TaxConnections

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

2 comments | Tags: Canada, Daniel Gray, domestic tax, FBAR, IRC, Tax Advisor, TaxConnections, Toronto

13 Dec 2017

Written by Ephraim Moss | Posted in FBAR • TaxConnections

Appeals Court Finally Affirms One Million Dollar FBAR Penalty

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

One comment | Tags: Earned Income & Housing Exclusions, Ephraim Moss, FATCA, FBAR Filing, FBAR Penalty, Foreign Real Estate, IRS Audits, IRS Forms, tax amnesty programs, tax connections, Trump Proposals, US Citizenship

07 Nov 2017

Written by Clinton Donnelly | Posted in Donald Trump • Expatriate • FATCA • FATCA Prosecutions • FBAR • Foreign Entity • Foreign Income • Foreign Investments • Foreign Transactions • Form 8938 • Individual • International • Tax Fraud/Evasion/Crimes • Tax Penalties • United States

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

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.

4 comments | Tags: Clinton Donnelly, FATCA, Fraud, money laundering, Paul Manafort, Tax Advisor

03 Nov 2017

Written by William Byrnes | Posted in FBAR • Foreign Investments • Tax Fraud/Evasion/Crimes

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

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.

No comments | Tags: Connecticut, Criminal Investigation, FBAR, IRS, penalties, Tax Advisor, William Byrnes

11 Aug 2017

Written by Ronald Marini | Posted in FBAR

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

One comment | Tags: CPA Advice, FBAR penalties

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