Do I need an FBAR Attorney? Regardless of where you are located, we are here to help you.
First and foremost, anyone can file their own FBAR while filing their yearly IRS tax returns. There is no need for an attorney, furthermore there is no specific FBAR attorney. The reason, if we were to guess, why people think there is a need for an FBAR lawyer is due to the rules and complications when a taxpayer forgets to file their FBARs and the potential criminal consequences. FBAR stands for Foreign Bank Account Report which must be filed every year that you meet the requirements to file an FBAR on form TDF 90-22.1. Over the last few years the IRS has made a push to seek out and prosecute taxpayers with foreign bank accounts. It is an initiative the IRS started at or around 2009 and also led to FATCA which started in 2010 in order to find Americans with foreign accounts. The positive part of this aggressive tactic is that the IRS has also created several programs to help those that are willing to come forward before the IRS finds you. You may not need a tax attorney to file your FBAR if you are current (meaning you’ve never been late on filing an FBAR), but if you have forgotten to file and report your past FBARs, then you should find a tax attorney that knows the rules and can help you minimize your penalty and tax liabilities, and most importantly try to prevent any criminal prosecution. This page will focus on 2 types of disclosures 1) Offshore Voluntary Disclosure Program and 2) Streamlined Voluntary Disclosure Program.
A question we often get at Bismark Tax, Inc. is “what if I just file all late FBARs and amended returns on my own, without using the voluntary disclosure programs?” That is what is known as a quiet disclosure. In a sense you are amending all the errors and making all the late filings and subjecting yourself to the penalties, which the IRS would appreciate. However, you have no protection from criminal prosecution. On the one hand you’ve complied with the filings, but on the other hand you have admitted to committing a crime (failure to report income, failure to report foreign bank accounts, etc.). It’s a lot easier for the IRS to prosecute a case where the defendant has submitted an admission through compliance.
In the alternative, a tax attorney familiar with FBARs, can help you with one of the disclosure options OVDP or Streamlined. The main question people ask us under disclosure circumstances is “will I avoid criminal prosecution?” In almost all cases the disclosure programs will kick in and help taxpayers avoid criminal prosecution for failure to file FBARs and/or failure to report all income.
- Offshore Voluntary Disclosure Program – The program offers taxpayers with undisclosed foreign accounts to become current, by filing late FBARs, amending returns and submitting additional documentation. Generally the penalty will be 27.5% of the highest aggregate value over a certain period or up to 50% if the US government is investigating the institution or the taxpayer willfully failed to report the foreign accounts.
- Streamlined Voluntary DIsclosure Program. The program offers taxpayers with undisclosed foreign accounts to become current, by filing late FBARs, amending returns and submitting additional documentations. The streamlined program has more requirements than the OVDP, but the penalty is only 5%. When there may be large penalties at stake, we think it is important to discuss with an attorney the difference between a 27.5%-50% penalty and a 5% penalty.
The worst thing you can do, in our opinion, is nothing and open yourself up to criminal tax prosecution. The IRS has new tools for detecting people with foreign bank accounts, so there is no reason to expose yourself to criminal tax prosecution and FBAR penalties that can amount in over 50% of your asset’s value.
Don’t live with the anxiety or hide in the shadows, give Bismark Tax, Inc. a call today for a consultation. Give us a call today for a free case evaluation by an attorney familiar with FBAR issues. (855)829-6055