You have three major option for filing Foreign Bank Account Reports (FBARs) for previous tax years. The best option for you will depend on the specific facts of your case, such as:
- Whether you failed to report foreign income during the tax years in question.
- Whether your failure to file was willful or non-willful.
- Your risk tolerance.
- How much the estimated amount of penalties will be when using the Streamlined Procedure or the new Offshore Disclosure Framework.
Consult a tax attorney before you use any type of offshore disclosure method to make sure you are correctly following IRS procedures.
Delinquent FBAR Submission
This method involves simply sending in the delinquent FBARs. You don’t pay any penalties and you don’t have to amend your tax returns.
You can only use this strategy if you are not under civil examination or criminal investigation by the IRS and have not been contacted about the delinquent FBARs. You won’t owe any penalties if you didn’t have foreign income or paid tax on your foreign income during the years you failed to file FBARs.
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