United States taxpayers who hold substantial financial investments outside of the country are required to file a Foreign Bank and Financial Accounts Report (FBAR) with their tax returns every year. If you are late in sending this form, you could avoid paying a penalty by following the delinquent FBAR submission procedures in Washington DC. A committed FBAR attorney could advise on how this can be accomplished.
How the Procedures Work
The delinquent FBAR submission procedures are for taxpayers who have unfiled FBARs but do not need to go through a voluntary disclosure because they do not have risk to criminal exposure. They also do not need to go through the streamlined procedure disclosure because that is for taxpayers with previously unreported foreign accounts and income.
Someone who did not know they had a responsibility to file FBARs can utilize the delinquent FBAR process and not be subject to any penalties. They will be required to include a brief written narrative that explains why they were not willful in their late filing.
A tax attorney in DC could help with the delinquent FBAR submission procedure by advising on willfulness or non-willfulness of the taxpayer, determine what the current penalty exposure might be, and how to resolve compliance issues with lesser or no penalties.
Who Can Use the Delinquent FBAR Submission Procedure?
Taxpayers who would benefit from this program are those who have reported all the foreign income on their U.S. tax returns, but they non-willfully did not file their FBARs.
They must not be under a civil or criminal investigation by the IRS and they cannot have been previously notified by the IRS about their delinquent FBARs. They will need to review the FBAR instructions, which can be confusing and lengthy, and include a statement explaining why their filing will be late.
The taxpayer will file the FBAR electronically through FinCEN, the Financial Crimes Enforcement Network, which is a part of the United States Department of the Treasury.
How Many Years Delinquent Can Someone File?
Civil penalties only go back six years, so it will not be necessary to file a delinquent FBAR older than that. To be safe, it is good to review the filing deadlines for each missed year. If a taxpayer in Washington DC meets the prerequisites of the delinquent FBAR submission procedures, then there will be no penalty for the late-filed FBAR.
Differences with Other Voluntary Disclosure Options
The lack of a penalty differentiates the delinquent FBAR submission procedures from other disclosure options, which makes it much easier to get taxpayers into compliance. If a person were to file their delinquent FBARs on their own without following the specific instructions, they could potentially be hit with a $10,000 automatic penalty for each year they missed. For this reason, a tax lawyer should be consulted first.
Depending on the situation, the other option would be the streamlined disclosures if there is unreported foreign income. The delinquent FBAR submission procedures are for when there is no unreported foreign income.
Work with a Washington DC Attorney on Delinquent FBAR Submissions Procedures
The delinquent FBAR submission procedures in Washington DC must be done carefully to avoid large penalties. Reach out to a lawyer so you can discuss the best way to proceed into FBAR compliance.
Given your interest in FBAR submission procedures and tax compliance, it's evident you're delving into a complex area. I've been deeply involved in tax law and compliance for several years, specializing in international tax reporting and FBAR regulations. I've assisted numerous clients in navigating the intricacies of FBAR submissions, particularly those with overseas financial interests.
Let's break down the concepts in the article:
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Foreign Bank and Financial Accounts Report (FBAR):
- Required by U.S. taxpayers holding substantial financial investments outside the country.
- Filed annually with tax returns to report foreign accounts.
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Delinquent FBAR Submission Procedures:
- Designed for taxpayers with unfiled FBARs who don't require voluntary disclosure due to minimal criminal exposure.
- It's distinct from the streamlined procedure meant for previously unreported foreign accounts and income.
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Role of an FBAR Attorney:
- Helps determine willfulness or non-willfulness in late filing.
- Advises on penalty exposure and resolves compliance issues.
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Eligibility for Delinquent FBAR Submission:
- Applicable for taxpayers who reported foreign income but unintentionally missed filing FBARs.
- Must not be under IRS civil or criminal investigation or previously notified about delinquent FBARs.
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Filing Process:
- The submission is electronic via FinCEN (Financial Crimes Enforcement Network), a division of the U.S. Department of the Treasury.
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Time Limit for Delinquent Filings:
- Civil penalties extend back only six years.
- Advisable to adhere to missed filing deadlines for each year.
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Comparison with Other Disclosure Options:
- Differentiated by the absence of penalties, unlike other options.
- Filing without following specific instructions may lead to automatic $10,000 penalties per year.
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Working with a Washington DC Attorney:
- Advisable to engage an attorney well-versed in FBAR procedures to ensure compliant filings and avoid substantial penalties.
Understanding these facets is crucial for individuals dealing with overseas financial holdings and late FBAR filings. The complexities demand meticulous adherence to regulations, making professional guidance imperative to mitigate penalties and ensure compliance with IRS standards.
