FBAR – How to get Rid of FBAR Penalties – Fresh Start Tax L.L.C – FBAR Penalties & Representation
There is fear when FBAR is mentioned. Disclosure, criminal, money and penalties are words attached with FBAR.
Many taxpayers are stuck as to whether to file or not.
My rule of thumb as a former IRS Agent, I recommend you find the IRS before they find you.
FBAR is here to stay and FBAR is becoming the beast of the IRS.
So much so that FBAR generated over $5.5 billion in Revenue to the Feds over the past couple years.
Not only is the Fed collecting the taxes but the IRS penalties will choke a horse. Part of the fear with taxpayers coming forward is the fear of not only paying the tax but also paying the penalties as well and having the money to do so.
It is not easy to get FBAR Penalties removed or abated because the IRS has set a tone and a theme of “just deny the claim.” The IRS will tell the IRS Auditing Revenue Agents to just disallow all penalty abatement claims unless the taxpayers fight for the abatement. A taxpayer must fight to have FBAR penalties abated.
What is the FBAR Filing Criteria
In order to determine whether or not the FBAR is required, all of the following must apply:
1. The filer is a U.S. person;
2. The U.S. person has a financial account(s);
3. The financial account is in a foreign country;
The U.S. person has a financial interest in the account or signature or other authority over the foreign financial account; and,
a. The aggregate amount(s) in the account(s) valued in dollars exceed $10,000 at any time during the calendar year.
The IRS code as it relates to FBAR Penalties – Its the Examiner Discretion
- The IRS tax examiner may determine that the facts and circumstances of a particular case do not justify asserting a penalty. There is tremendous discretion the examiner has on these case.
- 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 tax penalty is appropriate or justified , the IRS has established penalty mitigation guidelines to aid the examiner in applying penalties in a uniform manner.
- The IRS tax 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 tax 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, should be considered only in the most egregious cases.
Did you know that the the FBAR penalty is calculated not on your account earnings, but rather, on your account value?
As an example, if you have an account that is worth $1,000,000, the IRS, for one year, can assess a $500,000 FBAR penalty.
For two years, the FBAR penalty could be equal to the amount of the account. You see, the IRS is not limited to just two years, the IRS could potentially assess the FBAR for 6 or more years.
This is the very reason taxpayers need professional representation for both the reporting , filing and for the abatement of penalties and interest.
So you can see the FBAR penalty can be particularly devastating. So you need great professional tax advice on how to best deal with your unique and personal tax situation.You should seek the counsel of a tax attorney.
If you call Fresh Start tax LLC 1-866-700-1040 and speak directly to our FBAR tax excerpts you can get the best counsel available. All initial consultations are free of charge.
You only pay us if we begin work.
Go to our home page, on the left side you will find Penalty Abatement’s, open that box and you will find a very comprehensive list of reasons IRS will accept as reason cause.
Call us today for a free tax consult. 1-866-700-1040
