FBAR Penalties – Do you have Reasonable Cause – Affordable FBAR Tax Help, Problems Experts

by Fresh Start Tax | Jun 5, 2013 | FBAR

 
Getting rid of FBAR Penalties
The IRS has been delegated authority to assess FBAR civil penalties.
There are civil penalties for negligence, pattern of negligence, non-willful, and willful violations.
Whenever there is an FBAR violation, the examiner will either issue the FBAR warning letter, Letter 3800, or determine a penalty. See IRM 4.26.17 for the Letter 3800 procedures.
 

Reason for FBAR Penalties

 
Penalties should be asserted only to promote compliance with the FBAR reporting and record keeping requirements. In exercising their discretion, examiners should consider whether the issuance of a warning letter and the securing of delinquent FBARs, rather than the assertion of a penalty, will achieve the desired result of improving compliance in the future.
 

Civil Penalties for FBAR

 
FBAR civil penalties have varying upper limits, but no floor.
The tax examiner has discretion in determining the amount of the penalty, if any. Examiner discretion is necessary because the total amount of penalties that can be applied under the statute can greatly exceed an amount that would be appropriate in view of the violation.
Tax Examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether penalties should be asserted and the total amount of penalties to be asserted.
Because FBAR penalties do not have a set amount, IRS has developed penalty mitigation guidelines to assist examiners in the exercise of their discretion in applying these penalties. The mitigation guidelines are only intended as an aid for the examiner in determining an appropriate penalty amount.
The examiner must still consider whether a warning letter or a penalty amount that is less than what would be called for under the mitigation guidelines would be more appropriate given the facts and circumstances of a particular case.
 

 An Example

 
For example, if an individual failed to report the existence of five small foreign accounts with a combined balance of $20,000 for all five accounts but the income from each account was properly reported and the taxpayer made no effort to conceal the existence of the account, it may be more appropriate to issue a warning letter rather than assert penalties under the mitigation guidelines.
FBAR penalties are determined per account, not per unfiled FBAR, for each person required to file. Penalties apply for each year of each violation.
As noted above, however, examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether penalties should be asserted and the total amount of penalties to be asserted.
 

Multiple FBAR Penalties

 
There may be multiple FBAR civil penalty assessments arising from one account.
FBAR civil penalties can apply to each person with a financial interest in, or signature or other authority over, the foreign financial account.
Thus there may be multiple penalty assessments if there is more than one account owner or if a person other than the account owner has signature or other authority over the foreign account. Each person can be liable for the full amount of the penalty.
Some taxpayers who are dual citizens of the U.S. and a foreign country or who are merely U.S. citizens living and working abroad, may have failed to timely file their FBAR reports.
 

Good News about FBAR Penalties

 
The good news is that there is a reasonable case exception under the FBAR Statute that that may eliminate the FBAR penalty altogether..
The authority for the “reasonable cause” exception is found in the IRS Manual IRM 4.26.16.4.3.1 (07-01-2008). See IRS.gov for more on this.
This IRM approves of the reasonable cause guidance provided under 26 C.F.R. § 1.6664, Reasonable Cause and Good Faith Exception to the § 6662 penalties. IR-2012-65, June 26, 2012 offers a new procedure that will go into effect September 1, 2012, that speak to the reasonable cause exception to the FBAR penalty.
Whether a failure to file or failure to pay is due to “reasonable cause” is based on a consideration of the facts and circumstances.
Reasonable cause relief is generally granted by the IRS when you demonstrate that you exercised ordinary business care and prudence in meeting your tax obligations but nevertheless failed to meet them. In determining whether you exercised ordinary business care and prudence.
 

The IRS will consider all available information, including:

• The reasons given for not meeting your tax obligations;

• Your compliance history;

• The length of time between your failure to meet your tax obligations and your subsequent compliance; and

• Circumstances beyond your control.

 
FBAR reasonable cause may be established if you show that you were not aware of specific obligations to file returns or pay taxes, depending on the facts and circumstances.
Among the facts and circumstances that will be considered are:
 

• Your education level;

• Whether you have previously been subject to the FBAR Reporting  tax;

• Whether you have been penalized before, your history plays a very important role.

• Whether there were recent changes in the tax forms or law that you could not reasonably be expected to know; and

• The level of complexity of a tax or compliance issue.

• Reliance upon the advice of a professional tax advisor who was informed of the existence of the foreign financial account.

• Evidence that the foreign account was established for a legitimate purpose.

• Evidence that there was no effort to intentionally conceal the reporting of income or assets.

• Evidence that there was no tax deficiency related to the unreported account.

• There may be other factors in addition to those listed that may weigh in favor of a determination that the failure to file was due to reasonable cause. is the job of the tax professional that you have retained to help with these other factors.

• Ignorance of the law, if reasonable along with a good faith effort to comply with the law if you could not reasonable be expected to know of the FBAR requirement.

• No single factor will determine reasonable cause. It is a facts and circumstances test. As a former IRS agent I can tell you, look at the whole body of the case.

FBAR Penalties –  IRS Tax Examiner Discretion

 
 
The examiner may determine that the facts and circumstances of a particular case do not justify asserting a penalty. If there was an FBAR violation but the examiner determines that a penalty is not appropriate, the examiner should issue the FBAR warning letter, Letter 3800.
When a penalty is appropriate, IRS has established penalty mitigation guidelines to aid the examiner in applying penalties in a uniform manner. The examiner may determine that a penalty under these guidelines is not appropriate or that a lesser penalty amount than the guidelines would otherwise provide is appropriate or that the penalty should be increased (up to the statutory maximum).
The examiner must make such a determination with the written approval of the examiner’s manager and document the decision in the work papers.
Factors to consider when applying examiner discretion may include, but are not limited to, the following:
 

• Whether compliance objectives would be achieved by issuance of a warning letter;

• Whether the person who committed the violation had been previously issued a warning letter or has been assessed the FBAR penalty;

•  The nature of the violation and the amounts involved; and,

•  The cooperation of the taxpayer during the examination.

 
Given the magnitude of the maximum penalties permitted for each violation, the assertion of multiple penalties and the assertion of separate penalties for multiple violations with respect to a single FBAR form, will be considered.
 
 
 

FBAR Penalties – Do you have Reasonable Cause – FBAR Tax Help, Problems Experts

FBAR FILING DEADLINE JUNE 30, 2013 – FILE FBAR – AFFORDABLE ACCOUNTANTS, CPA'S, ATTORNEYS

by Fresh Start Tax | May 28, 2013 | FBAR

          FBAR Filing Due June 30, 2013

Those with Foreign Assets of U.S. Tax Obligations

Fresh Start Tax LLC reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, that they may have a U.S. tax liability and a filing requirement in 2013.
The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return.
Eligible taxpayers get two additional days because the normal June 15 extended due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies.
Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 17 depending on sources of income.
Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return.
Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets.
Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.
Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted and what information must be provided.
Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013.
For details, see Publication 4261: Do You Have a Foreign Financial Account?
Though this form can be filed on paper, Treasury encourages taxpayers to file it electronically.
Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $57,000 or less can use brand-name software to prepare their returns and then e-file them for free.
Taxpayers with an AGI greater than $57,000 who don’t qualify for Free File can still choose the accuracy, speed and convenience of electronic filing. Check out the e-file link on IRS.gov for details on using the Free File Fillable Forms or e-file by purchasing commercial software.
A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, get help choosing a software provider. Both e-file and Free File are available until Oct. 15, 2013, for anyone filing a 2012 return.
Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map to get answers.
An International Tax Topic Index page was added recently. The IRS Tax Map assembles or groups IRS forms, publications and web pages by subject and provides users with a single entry point to find tax information.
 
FBAR FILING DEADLINE JUNE 17, 2013 – FILE FBAR  – ACCOUNTANTS, CPA’S, ATTORNEYS

FBAR – Australia, United Kingdom – FBAR Filing, Reporting, Representation – Attorneys, Lawyers, CPA's

by Fresh Start Tax | May 21, 2013 | FBAR

FBAR – Australia, United Kingdom – FBAR Filing, Reporting, Representation – Attorneys, Lawyers, CPA’s   1-866-700-1040

 
If you are looking for FBAR help or advice contact our firm today and learn more about FBAR filing, FBAR reporting, or FBAR representation from tax attorneys, tax lawyers and certified public accountants.
All initial consultations are free of charge.
We have over 206 years professional tax experience in over 60 years of working directly for the Internal Revenue Service.
We have been in private  practice since 1982 and have an A+ rating by the Better Business Bureau.
The US government is very serious on those individuals who need to file Fbar.
This crackdown started about three years ago due to the volumes of money the IRS collected through their new approach of extracting money from thousands and thousands of individuals who have unreported international accounts.
The Internal Revenue Service found that 33,000 taxpayers or entities had come forward to file Fbar and the Internal Revenue Service collected just north of $5.5 billion. Some recent  studies have indicated and anticipate that there is another hundred and $150- $400 billion yet to be collected through F bar.
With that type of money on the line do not expect the feds to back down anytime soon. If you need to file for F bar and you need effective tax representation contact us today for free initial consultation and let us guide you through the process
 

Australia, United Kingdom

 
For those of you who are contemplating whether to file or not please remember this, find IRS before they find you.

See below some news regarding F bar for those in Australia and the United Kingdom

 
 
The tax administrations from the United States, Australia and the United Kingdom announced today a plan to share tax information involving a multitude of trusts and companies holding assets on behalf of residents in jurisdictions throughout the world.
The three nations have each acquired a substantial amount of data revealing extensive use of such entities organized in a number of jurisdictions including Singapore, the British Virgin Islands, Cayman Islands and the Cook Islands.
The data contains both the identities of the individual owners of these entities, as well as the advisors who assisted in establishing the entity structure.
The IRS, Australian Tax Office and HM Revenue & Customs have been working together to analyze this data and have uncovered information that may be relevant to tax administrations of other jurisdictions.
Thus, they have developed a plan for sharing the data, as well as their preliminary analysis, if requested by those other tax administrations.
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” said IRS Acting Commissioner Steven T. Miller. “Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
There is nothing illegal about holding assets through offshore entities; however, such offshore arrangements are often used to avoid or evade tax liabilities on income represented by the principal or on the income generated by the underlying assets.
In addition, advisors may be subject to civil penalties or criminal prosecution for promoting such arrangements as a means to avoid or evade tax liability or circumvent information reporting requirements.
It is expected that this multilateral cooperation and coordinated effort will allow many countries to efficiently process this information and effectively enforce any laws that may have been broken. Increasingly, tax administrations are working together in this way to assist one another in identifying non-compliance with the tax laws.
U.S. taxpayers holding assets through offshore entities are encouraged to review their tax obligations with respect to these holdings, seek professional advice if necessary, and to participate in the IRS Offshore Voluntary Disclosure Program where appropriate.
Failure to do so may result in significant penalties and possibly criminal prosecution.
 
FBAR – Australia, United Kingdom – FBAR Filing, Reporting, Representation – Attorneys, Lawyers, CPA’s

Tax Filing Compliance – Non Resident U.S. Taxpayers – File, Settlements – Tax Attorneys, CPA's, Accountants

by Fresh Start Tax | May 16, 2013 | FBAR

Tax Filing Compliance – Non Resident U.S. Taxpayers – File, Settlements -Tax Attorneys, CPA’s,  Tax Accountants   1-866-700-1040

 
 
We are tax experts for tax filing compliance programs for nonresident US taxpayers. We are comprised of tax attorneys, certified public accountants and former IRS agents and managers who are tax experts in foreign tax matters and tax compliance issues.
Contact us for free tax consultation today in person, by phone or by Skype.
We have over 206 years of professional tax experience in over 60 years of working directly for the Internal Revenue Service and the local, district, and regional tax offices of the Internal Revenue Service.
We are also Fbar experts.
 
Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers
 
The IRS announced streamlined filing compliance procedures for non-resident U.S. taxpayers to go into effect on September 1, 2012.
These procedures are being implemented in recognition that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), Form TD F 90-22.1, but have recently become aware of their filing obligations and now seek to come into compliance with the law.
These new procedures are for non-residents including, but not limited to, dual citizens who have not filed U.S. income tax and information returns.
 

Description of the New Streamlined Procedure

 
 
This streamlined procedure is designed for taxpayers that present a low compliance risk. All submissions will be reviewed, but, as discussed below, the intensity of review will vary according to the level of compliance risk presented by the submission.
For those taxpayers presenting low compliance risk, the review will be expedited and the IRS will not assert penalties or pursue follow-up actions. Submissions that present higher compliance risk are not eligible for the streamlined processing procedures and will be subject to a more thorough review and possibly a full examination, which in some cases may include more than three years, in a manner similar to opting out of the Offshore
 

Voluntary Disclosure Program.

 
 
Taxpayers utilizing this procedure will be required to file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years.
Payment for the tax and interest, if applicable, must be remitted along with delinquent tax returns. For a summary of information about federal income tax return and FBAR filing requirements and potential penalties, see IRS Fact Sheet FS-2011-13. (December 2011).
In addition, retroactive relief for failure to timely elect income deferral on certain retirement and savings plans where deferral is permitted by relevant treaty is available through this process.
The proper deferral elections with respect to such arrangements must be made with the submission. See instructions below.
 

Eligibility

 
This procedure is available for non-resident U.S. taxpayers who have resided outside of the U.S. since January 1, 2009 and who have not filed a U.S. tax return during the same period.
These taxpayers must present a low level of compliance risk as described below
Amended returns submitted through this program will be treated as high risk returns and subject to examination, except for those filed for the sole purpose of submitting late-filed Forms 8891 to seek relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty.
It should be noted that this relief is also available under the Offshore Voluntary Disclosure Program. See below for the information required to be submitted with such requests. (If you need to file an amended return to correct previously reported or unreported income, deductions, credits, tax etc, you should not use this streamlined procedure.
Depending on your circumstances, you may want to consider participating in the Offshore Voluntary Disclosure Program.)
All tax returns submitted under this procedure must have a valid Taxpayer Identification Number (TIN). For U.S. citizens, a TIN is a Social Security Number (SSN). For individuals that are not eligible for an SSN, an Individual Taxpayer Identification Number (ITIN) is a valid TIN.
Tax returns filed without a valid SSN or ITIN will not be processed. For those who are ineligible for an SSN, but who do not have an ITIN, a submission may be made through this program if accompanied by a complete ITIN application.
For information on obtaining an SSN, see www.ssa.gov. For information on obtaining an ITIN, see the ITIN page.
 

Compliance Risk Determination

 
The IRS will determine the level of compliance risk presented by the submission based on information provided on the returns filed and based on additional information provided in response to a Questionnaire required as part of the submission. Low risk will be predicated on simple returns with little or no U.S. tax due.
Absent any high risk factors, if the submitted returns and application show less than $1,500 in tax due in each of the years, they will be treated as low risk and processed in a streamlined manner.
 

The risk level may rise if any of the following are present:

• If any of the returns submitted through this program claim a refund;

• If there is material economic activity in the United States;

• If the taxpayer has not declared all of his/her income in his/her country of residence;

• If the taxpayer is under audit or investigation by the IRS;

• If FBAR penalties have been previously assessed against the taxpayer or if the taxpayer has previously received an FBAR warning letter;

• If the taxpayer has a financial interest or authority over a financial account(s) located outside his/her country of residence;

• If the taxpayer has a financial interest in an entity or entities located outside his/her country of residence;

• If there is U.S. source income; or

• If there are indications of sophisticated tax planning or avoidance.

Tax Filing Compliance – Non Resident U.S. Taxpayers – File, Settlements – Attorneys, CPA’s