by Fresh Start Tax | May 9, 2013 | FBAR
FBAR Help – Singapore, Virgin Islands, Cayman Islands, Cook Islands – FBAR Experts 1-866-700-1040
If you are having FBAR issues and need help from a professional tax firm contact us today for free initial consultation because the IRS is on the warpath to combat offshore tax evasion. See release below.
With the federal government collecting over 5 1/2 billion dollars from the first three years of Fbar they have no plans of stopping and the government is launching a full-scale attack on all those taxpayers who are not coming forward and declaring their income.
For every one dollar that IRS spends on FBAR it collects six. This is a true revenue and moneymaker for the Internal Revenue Service and you do not want to be caught up in the middle of this Fbar machine because simply put prison time will be an option.
We are comprised of tax attorneys, tax lawyers, certified public accountants and former IRS agents and managers who have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service in the local, district, and regional tax office of the Internal Revenue Service.
Contact us today for free initial tax consultation and see how we can make this a seamless and easy process for you to get back into the system.
What is an FBAR?
An FBAR is a Report of Foreign Bank and Financial Accounts. The form number is TD F 90-22.1 (PDF).
Who must file an FBAR?
Any United States person who has a financial interest in or signature authority or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
Latest IRS Release to Combat Offshore Tax Evasion
The tax administrations from the United States, Australia and the United Kingdom announced 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 Help – Singapore, Virgin Islands, Cayman Islands, Cook Islands – FBAR Experts, Attorneys, CPA’s, Former IRS
by Fresh Start Tax | May 2, 2013 | FBAR
FBAR 2014 – IRS looking to be much more Aggressive – Filing & Paying 1-866-700-1040
Just why is IRS being more aggressive on FBAR Cases?
Simply put, that’s where the money is!
If you are looking for FBAR professional tax representation contact us today for a no cost professional tax consult.
We are comprised of tax attorneys, certified public accountants, and former IRS agents and managers with over 60 years working directly for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service.
First 3 years of FBAR reporting
After the first three years of a full-court press by the Internal Revenue Service regarding FBAR filing, reporting, paying and the receiving of amended tax returns, the IRS collected over $5 billion.
With this sort of money on the line do not expect the IRS to go away soon.
As a matter of fact, the latest IRS budget has shown that they are going to put a considerable amount of their enforcement revenue on the foreign tax compliance act FTCA).
Some of the reports indicate that the return on investment is anywhere from 3 to 1 to 6 to 1 so don’t expect this to go away soon.
What is helping IRS to be more aggressive.
Country by country is giving into the IRS demands to turn over financial records that belong to US citizens and Americans that should’ve filed tax returns and who have failed to do so.
Nobody ever thought that Lichtenstein would fall into the United States demands however it did cave in to US pressure. As a result the dominoes start to fall.
As a result the IRS is using their criminal enforcement to go ahead and force people into becoming fully compliant. The Internal Revenue Service keeps on their website a list of all those that have fallen to FBAR along with her current sentences matching the penalty of their crimes.
I should also state that many of these taxpayers with unfiled FBARs are very simple and do not require much effort to get fully compliant. I would imagine that 90% of all Fbar cases fall in the simple to easy category.
It best to reach out to the Internal Revenue Service before they reach out to you.
If the IRS reaches out to you first, without question you could be involved in a criminal prosecution. However, if you reach out to them it is very doubtful that you will have to worry about any criminal activities.
The whole goal here is to keep this a civil matter and make sure you file and pay the correct amount of taxes so you can avoid fear and worry at a later date.
Implement Foreign Account Tax Compliance Act (FATCA) 2013 and beyond
This initiative will provide the resources for the IRS to implement changes required by of FATCA included in the Hiring Incentives to Restore Employment (HIRE)(PublicLaw111-147).
ROI of $3.7 to $1.
New reporting, disclosure, and withholding requirements will produce additional annual enforcement revenue of $115.4 million once the new hires reach full potential in FY 2016,an ROI of $3.7 to $1.
Address International and Offshore Compliance Issues.
This initiative will strengthen enforcement activities to address offshore tax evasion and expand the IRS’s global presence and pursuit of international tax and financial crimes. The IRS continues to address tax-avoidance schemes involving offshore activity.
This request will address the significant growth in international activities in the global tax environment and produce additional annual enforcement revenue of $192.8 million, once the new hires reach full potential in FY 2016,an ROI of $4.5 to $1.
Who is required to File and Pay
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions.
The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law.
Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.
Recent FBAR Guidance
On February 24, 2011, the Treasury Department published final regulations amending the FBAR regulations. These regulations became effective March 28, 2011, and apply to FBARs required to be filed with respect to foreign financial accounts maintained in calendar year 2010, and for FBARs required to be filed with respect to all subsequent calendar years.
The FBAR form and instructions (PDF) have been revised to reflect the amendments made by the final regulations.
Financial Crimes Enforcement Network (FinCEN)
On May 31, 2011, the Financial Crimes Enforcement Network (FinCEN) issued FinCEN Notice 2011-1 (PDF), revised June 6, 2011, to provide filing deferral to certain individuals with signature authority over, but no financial interest in, foreign financial accounts of their employer or a closely related entity.
The filing deadline for employees and officers to report signature authority over these accounts was extended to June 30, 2012, for the following individuals:
An employee or officer of an entity under 31 CFR § 1010.350(f)(2)(i)-(v) who has signature or other authority over and no financial interest in a foreign financial account of a controlled person of the entity; or
An employee or officer of a controlled person of an entity under 31 CFR § 1010.350(f)(2)(i)-(v) who has signature or other authority over and no financial interest in a foreign financial account of the entity, the controlled person, or another controlled person of the entity.
For purposes of FinCEN Notice 2011-1, a controlled person is a United States or foreign entity more than 50 percent owned (directly or indirectly) by an entity under 31 CFR § 1010.350(f)(2)(i)-(v).
On June 17, 2011, FinCEN issued Notice 2011-2 (PDF) to provide filing deferral for certain officers or employees of investment advisors registered with the Securities and Exchange Commission who have signature authority over, but no financial interest in, foreign financial accounts of their employer.
The filing deadline for employees and officers to report signature authority over these accounts was similarly extended to June 30, 2012.
Due to additional questions and concerns regarding the signature authority filing exceptions within Notice 2011-1 and Notice 2011-2, FinCEN twice extended the revised filing deadlines imposed by those two notices.
On February 14, 2012, FinCEN issued FinCEN Notice 2012-1 (PDF), extending the reporting deadline to June 30, 2013, for signature authority reporting of the employees and officers identified in Notice 2011-1 and Notice 2011-2, to the same extent of reporting as originally set forth in those notices.
More recently, on December 26, 2012, FinCEN issued Notice 2012-2, further extending this same filing deferral to June 30, 2014.
All other U.S. persons required to file an FBAR this year are required to meet the June 30, 2013 filing date.
On Jan 9, 2012, the IRS reopened the Offshore Voluntary Disclosure Program following continued interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. This program will be open for an indefinite period until otherwise announced.
Who Must File an FBAR
United States persons are required to file an FBAR if:
1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
Exceptions to the Reporting Requirement
Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:
a. Certain foreign financial accounts jointly owned by spouses;
b. United States persons included in a consolidated FBAR;
c. Correspondent/nostro accounts;
d. Foreign financial accounts owned by a governmental entity;
e. Foreign financial accounts owned by an international financial institution;
f. IRA owners and beneficiaries;
g. Participants in and beneficiaries of tax-qualified retirement plans;
h. Certain individuals with signature authority over but no financial interest in a foreign financial account;
i. Trust beneficiaries; and
j. Foreign financial accounts maintained on a United States military banking facility.
Reporting and Filing Information
A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. Checking the appropriate block on FBAR-related federal tax return or information return questions (for example, on Schedule B of Form 1040, the “Other Information” section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing the FBAR, satisfies the account holder’s reporting obligation.
The FBAR is not filed with the filer’s federal income tax return.
The granting, by the IRS, of an extension to file federal income tax returns does not extend the due date for filing an FBAR.
You may not request an extension for filing the FBAR. The FBAR is an annual report and must be received by the Department of the Treasury in Detroit, MI, on or before June 30th of the year following the calendar year being reported. While FinCEN strongly encourages individuals to electronically file FBARs, the form can be mailed to one of the two addresses below, provided that the mailing is received by June 30, 2013:
File by mailing the FBAR to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is required for a timely filed FBAR, address the parcel to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
Delivery messenger service contact telephone number: (313) 234-1062.
Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Electronic Filing for FBAR Forms – MANDATORY Beginning July 1, 2013
On June 29, 2011, FinCEN announced that all FinCEN forms must be filed electronically with certain exceptions.
The FBAR was granted a general exemption from mandatory electronic filing through June 30, 2013. E-filing is a quick and secure way for individuals to file FBARs. Filers will receive an acknowledgement of each submission.
For more information about FBAR e-filing, read the FinCEN news release.
New Reporting Requirements by U.S. Taxpayers Holding Foreign Financial Assets (Form 8938)
by Fresh Start Tax | May 2, 2013 | FBAR
Unfiled, Past Due FBAR – FBAR Experts – FBAR Reporting 1-866-700-1040
The last thing you want to do is have a letter or a knock on your door from the Internal Revenue Service indicating that you have not filed past-due FBAR reports.
The feds are digging in deep to all taxpayers who were required to file FBAR reports and the reason is quite simple.
Over the last three filing seasons the Internal Revenue Service has collected $5 billion in revenue just from those taxpayers coming forward and amending unfiled or past-due FBAR returns and the related income tax returns.
With this type of money on the line, the federal government is beefing up their resources to go ahead and continue the revenue hunt and bring those who have unfiled or past due FBARs to criminal prosecution.
It is in your best interest to make sure you come forward before the Internal Revenue Service reaches out to you.
Once you are contacted by the Internal Revenue Service it may be too late because you could find yourself in the middle of a criminal investigation with both the Department of Justice and the IRS.
I should inform you that most of these cases are very simple and I do not want taxpayers to be alarmed or to live in fear. Simply by making a voluntary disclosure you can live without the worry or fear.
If you have any questions we can help relieve any of the fear you have as a result of unfiled or past due FBAR reports. Simply call us today and you will speak directly to a certified FBAR tax attorney expert who can help you take care of the situation once and for all. Remember reach out to IRS before they reach out to you.
We are comprised of Tax Attorneys, CPA’s and Former IRS Agents. We know the IRS system inside and out. We have over 60 years of direct IRS work experience in the local, district and regional offices of the IRS. We also taught Tax Law at the IRS.
As a general rule IRS will not enforce criminal penalties if you contact them before they contact you. The key is letting IRS know you will be filing your tax returns. At this point it only becomes a civil matter.
As a general rule, we contact IRS by filing a power of attorney so you will never speak to the IRS. We handle all the negotiations and settle the case so you pay the lowest amount allowed by law including the abatement of penalties and interest if your case warrants.
Who needs to file FBAR
A person or individual who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income.
How to file Unfiled or Past due FBARs
Checking the appropriate block on FBAR- related federal tax return or information return questions (for example, on Schedule B of Form 1040, the “Other Information” section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing the FBAR, satisfies the account holder’s reporting obligation.
FBAR is not filed with,
The FBAR is not filed with the filer’s federal income tax return. The granting, by the IRS, of an extension to file federal income tax returns does not extend the due date for filing an FBAR.
Due Date for FBAR
You may not request an extension for filing the FBAR. The FBAR is an annual report and must be received by the Department of the Treasury in Detroit, MI, at one of the two addresses below, on or before June 30th of the year following the calendar year being reported.
File by mailing the FBAR to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is required for a timely filed FBAR, address the parcel to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
Call us today for a no cost consultation and speak directly to a Tax Attorney or Former IRS agent 1-866-700-1040.
Unfiled, Past Due FBAR – FBAR Experts, FBAR Reporting – Professional Tax Firm, Nationwide
by Fresh Start Tax | Apr 24, 2013 | FBAR
FBAR Filing, Reporting, Amnesty – Tax Attorneys, Lawyers – FBAR Expert Settlement 1-866-700-1040
The federal government and the Internal Revenue Service has found a new revenue stream through FBAR reporting or lack thereof.
The Internal Revenue Service and the Department of Justice are having a field day ever since the government has opened the door for full compliance in FBAR Reporting.
It is been very apparent over the last three years that the IRS is no longer fooling around and if taxpayers do not become in compliance with the new Fbar reporting and filing laws, a criminal investigation looms and hangs over their heads.
For the most part, IRS is been very lenient with this program but talks inside the agency speaks about the heavy hand of the Internal Revenue Service applying their criminal power to start to prosecute people who are no longer compliant in filing Fbars and amending their tax returns.
The Internal Revenue Service has collected nearly $6 billion in the last three years ever since their declaration against those not filing Fbar.
Do yourself a favor and find the IRS before the IRS find you. If you are one of those taxpayers who have this issue it is your best interest to contact us today and speak directly do a tax attorney or tax lawyer who can help you through this situation settle your case.
You will find below the results of a recent case.
Preet Bharara, the U.S. Attorney for the Southern District of New York, and Victor S. O. Song, the Chief of the United States Internal Revenue Service (IRS) Criminal Investigation Division, announced today the filing of charges against seven individuals who collectively hid more than $100 million from the IRS by using sham companies to conceal their ownership of secret Swiss bank accounts held at UBS AG (UBS).
Two of those seven defendants, Jules Robbins and Federico Hernandez, pleaded guilty to separate criminal information’s filed today in Manhattan federal court and agreed to pay civil penalties of $20.8 million and $4.4 million, respectively. Robbins pleaded guilty before U.S. Magistrate Judge Ronald L. Ellis. Hernandez pleaded guilty before U.S. District Judge Denny Chin.
Charges also were unsealed today against five additional defendants: Kenneth Heller, Sybil Nancy Upham, Richard Werdiger, Ernest Vogliano and Shmuel Sternfeld. Upham, who surrendered this morning, was presented and arraigned before Magistrate Judge Ellis. Werdiger, who also surrendered this morning, is expected to be presented and arraigned before United States District Judge Paul G. Gardephe. Vogliano is expected to surrender to law enforcement authorities. Sternfeld and Heller remain at large.
According to the charging instruments unsealed today in Manhattan federal court, statements made in connection with the guilty plea proceedings involving Robbins and Hernandez, and other court documents:
For many years, UBS provided private banking services to U.S. taxpayers as part of its “U.S. cross-border banking business,” which employed approximately 60 UBS employees based in Switzerland.
From at least 2000 to 2008, UBS, through these employees, helped U.S. taxpayers conceal their Swiss-based assets, and the income earned on those assets, from the IRS.
UBS and the U.S. taxpayers, assisted by independent Swiss attorneys and financial advisors, hid these assets from the IRS by listing sham offshore companies as the account holders of UBS accounts, when in fact the U.S. taxpayers actually owned and controlled the accounts.
Four of the defendants – Upham, Heller, Vogliano and Sternfeld – removed their assets from UBS shortly after the publication of media reports in May 2008 that the Government’s criminal investigation of UBS might result in the disclosure of their unreported accounts to the United States Department of Justice.
Specifically to avoid this result, these defendants moved tens of millions of dollar collectively from UBS to smaller, lower-profile Swiss and Liechtenstein banks, hand-picked because they, unlike UBS, did not have offices in the United States.
Two of the defendants – Upham and Vogliano – repatriated funds from their UBS bank accounts to the United States by traveling or having a close family member travel from New York to UBS’s offices in Zurich, Switzerland, to pick up hundreds of thousands of dollars in cash or travelers checks and then return to the United States.
Under federal law, when filing Individual Income Tax Returns, Form 1040, U.S. taxpayers are obligated to report their worldwide income.
Additionally, taxpayers who have a financial interest in, or signature or other authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a particular year are required to file with the IRS a Report of Foreign Bank and Financial Accounts (FBAR), as indicated on Schedule B of Form 1040.
The defendants are variously charged with conspiracy crimes, criminal tax offenses, and/or willful failure to file FBARs. The cases against each of the seven defendants are outlined below.
Call us today for free initial consultation. You can speak directly to an IRS tax attorney or IRS tax lawyer.
FBAR Filing, Reporting, Amnesty – Tax Attorneys, Lawyers – FBAR Expert Settlement
by Fresh Start Tax | Apr 1, 2013 | FBAR
FBAR Filing Assistance – Tax Attorneys, Lawyers, Former IRS – FBAR Confidential Filing 1-866-700-1040
FBAR Filing Help is here in the way of Tax Attorneys, Tax Lawyers, CPA’s and Former IRS Agents.
If you have a sensitive FBAR Filing call us today and speak directly to Attorneys and Lawyers who can keep your conversation covered by privilege.
For simple FBAR filings go directly to IRS.gov and download the forms directly.
If you have issues that could arouse the interest of the IRS always be represented by Counsel.
Assistance Filing Criteria for FBAR
Taxpayer FBAR filers report on their accounts to the IRS.
Filers report their foreign accounts by:
1.completing boxes 7a and 7b on Form 1040 Schedule B, box 3 on the Form 1041 “Other Information” section, box 10 on Form 1065 Schedule B, or boxes 6a and 6b on Form 1120 Schedule N and.
2. completing Form TD F 90-22.1 (PDF).
Due Date for FBAR Filing ?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold.
The granting by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR.
FBAR Filers cannot request an extension of the FBAR due date. There is no provision in the code to do so.
Best Advice
If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available.
Where are FBAR Filing forms?
FBAR forms are available:
Online via IRS.gov in PDF.
Online via Department of the Treasury’s Financial Crimes Enforcement Network Web site in PDF
OR
By calling the IRS at 800-829-3676.
IRS has an Email address to ask questions, but be very careful!
You can send questions concerning the FBAR to FBARquestions@irs.gov. The email system does not accept actual FBAR reports.
Where can I file the FBAR?
You can send completed forms to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is used, send completed forms to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
The contact phone number for the delivery messenger service is 313-234-1062.
The number cannot be used to confirm that your FBAR was received.
The FBAR is not to be filed with the filer’s Federal tax return
.
Can I verify that my FBAR was filed?
Ninety days (90 ) after the date of filing, the filer can request verification that the FBAR was received.
An FBAR filing verification request may be made by calling 866-270-0733 and selecting option 1. Up to five documents may be verified over the phone.
There is no fee for this verification.
Alternatively, an FBAR filing verification request may be made in writing and must include the filer’s name, taxpayer identification number and the filing period.
There is a $5 fee for verifying five or fewer FBARs and a $1 fee for each additional FBAR. A copy of the filed FBAR can be obtained at a cost of $0.15 per page.
Check or money order should be made payable to the United States Treasury.
The request and payment should be mailed to:
IRS Enterprise Computing Center/Detroit
ATTN: Verification
P.O. Box 32063
Detroit, MI 48232
FBAR Filing Assistance – Tax Attorneys, Lawyers, Former IRS – Confidential FBAR Filing
by Fresh Start Tax | Apr 1, 2013 | FBAR
FBAR- Common questions and answers – Tax Attorneys, Lawyers – FBAR experts 1-866-700-1040
When it comes to FBAR reporting there is a common list of questions and answers that will help relieve the concerns of many taxpayers who have questions that need to be resolved.
Here is a common list of questions and answers that are frequently asked to the Internal Revenue Service.
If you are in any need of FBAR help call us today and speak directly to tax attorneys, tax lawyers who are truly FBAR tax are experts.
What is an FBAR?
An FBAR is a Report of Foreign Bank and Financial Accounts. The form number is TD F 90-22.1 (PDF).
Who must file an FBAR?
Any United States person who has a financial interest in or signature authority or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
What is a foreign country?
A “foreign country” includes all geographical areas outside the United States, the commonwealth of Puerto Rico, the commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States (including Guam, American Samoa, and the United States Virgin Islands).
What is a United States person?
“United States person” includes a citizen or resident of the United States, a domestic partnership, a domestic corporation, and a domestic estate or trust. See Announcement 2010-16.
Is a single-member LLC, which is a disregarded entity for U.S. tax purposes, a United States person for FBAR purposes?
Yes, the tax rules concerning disregarded entities do not apply with respect to the FBAR reporting requirement. FBARs are required under Title 31, not under any provisions of the Internal Revenue Code.
What constitutes signature or other authority over an account?
A person has signature authority over an account if such person can control the disposition of money or other property in it by delivery of a document containing his or her signature (or his or her signature and that of one or more other persons) to the bank or other person with whom the account is maintained.
Other authority exists in a person who can exercise power that is comparable to signature authority over an account by direct communication to the bank or other person with whom the account is maintained, either orally or by some other means.
Is a U.S. resident with power of attorney on his elderly parents’ accounts in Canada required to file an FBAR, even if the resident never exercised the power of attorney?
Yes, if the power of attorney gives the U.S. resident signature authority, or other authority comparable to signature authority, over the financial accounts.
Whether or not such authority is ever exercised is irrelevant to the FBAR filing requirement.
See IRS Notice 2010-23 for information regarding an extended due date to report signature authority over a foreign financial account.
How do filers report their accounts to the IRS?
Filers report their foreign accounts by (1) completing boxes 7a and 7b on Form 1040 Schedule B, box 3 on the Form 1041 “Other Information” section, box 10 on Form 1065 Schedule B, or boxes 6a and 6b on Form 1120 Schedule N and (2) completing Form TD F 90-22.1 (PDF).
When is the FBAR due?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold. The granting, by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR.
Filers cannot request an extension of the FBAR due date. See also Notice 2010-23.
If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available.
Where are FBAR forms available?
FBAR forms are available:
Online via IRS.gov in PDF.
Online via Department of the Treasury’s Financial Crimes Enforcement Network Web site in PDF.
By calling the IRS at 800-829-3676.
Where do I file the FBAR?
Send completed forms to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is used, send completed forms to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
The contact phone number for the delivery messenger service is 313-234-1062. The number cannot be used to confirm that your FBAR was received.
The FBAR is not to be filed with the filer’s Federal tax return.
How do I verify that my FBAR was filed?
Ninety days after the date of filing, the filer can request verification that the FBAR was received.
An FBAR filing verification request may be made by calling 866-270-0733 and selecting option 1. Up to five documents may be verified over the phone.
There is no fee for this verification.
Alternatively, an FBAR filing verification request may be made in writing and must include the filer’s name, taxpayer identification number and the filing period. There is a $5 fee for verifying five or fewer FBARs and a $1 fee for each additional FBAR. A copy of the filed FBAR can be obtained at a cost of $0.15 per page.
A Check or money order should be made payable to the United States Treasury.
The request and payment should be mailed to:
IRS Enterprise Computing Center/Detroit
ATTN: Verification
P.O. Box 32063
Detroit, MI 48232
Q. How does an FBAR filer amend a previously filed FBAR?
FBAR filers can amend a previously filed FBAR by:
Checking the Amended box in the upper right-hand corner of the first page of the form;
Making the needed additions or corrections;
Stapling it to a copy of the original FBAR;
and
Attaching a statement explaining the additions or corrections.
What happens if an account holder is required to file an FBAR and fails to do so?
Failure to file an FBAR when required to do so may potentially result in civil penalties, criminal penalties or both. If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late.
No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause. Keep copies of what you send for your records.
Can cumulative FBAR penalties exceed the amount in a taxpayer’s foreign accounts?
Yes, under the penalty provisions found in 31 U.S.C. 5314(a)(5), it is possible to assert civil penalties for FBAR violations in amounts that exceed the balance in the foreign financial account.
How long should account holders retain records of the foreign accounts?
Records of accounts required to be reported on an FBAR must be retained for a period of five years. Failure to maintain required records may result in civil penalties, criminal penalties or both.
For filing FBARs for prior years, should the current FBAR form be used or should the previous version of the form be used?
The current FBAR form (revised in October 2008) may be used to report a financial interest in, or signature or other authority over, financial accounts that were maintained in years prior to 2008.
However, since the changes to the current FBAR form reflect a change in the reporting requirements, the instructions for the prior version of the FBAR form (revised in July 2000) may be relied upon for the purpose of determining the filing requirements for properly reporting financial accounts maintained in calendar years prior to 2008.
Does more than one form need to be filed for a husband and wife owning a joint account?
No, provided that the names and Social Security numbers of the joint owners are fully disclosed on the filed FBAR. A spouse having a joint financial interest in an account with the filing spouse should be included as a joint account owner in Part III of the FBAR.
The filer should write “(spouse)” on line 26 after the last name of the joint spousal owner. If the only reportable accounts of the filer’s spouse are those reported as joint owners, the filer’s spouse need not file a separate report.
If the accounts are owned jointly by both spouses, the filer’s spouse should also sign the report. It should be noted that if the filer’s spouse has a financial interest in other accounts that are not jointly owned with the filer or has signature or other authority over other accounts, the filer’s spouse should file a separate report for all accounts including those owned jointly with the other spouse.
Are UBS account holders still eligible for the Voluntary Disclosure Practice?
The income earned on my client’s foreign account has not been reported on his Form 1040, nor have FBARs been filed.
The Voluntary Disclosure Practice is a longstanding practice of IRS Criminal Investigation of taking timely, accurate, and complete voluntary disclosures into account in deciding whether to recommend to the Department of Justice that a taxpayer be criminally prosecuted.
It enables non compliant taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution. When a taxpayer truthfully, timely and completely complies with all provisions of the Voluntary Disclosure Practice, the IRS will not recommend criminal prosecution to the Department of Justice.
Although the use of special voluntary disclosures by taxpayers with unreported income from offshore accounts expired on Oct. 15, 2009, non compliant taxpayers can still use the VDP to resolve their tax liabilities.
Voluntary disclosure – Never Make without an Attorney
