FBAR Penalties – Tax Attorneys, Lawyers, Former IRS – FBAR Expert – Removing FBAR Penalties

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For those who were suppose to report and pay taxes as a result of FBAR filings, the penalties phase that IRS imposing is frightening and very costly.

It is possible if reasonable cause exists to abate penalties and interest.

You should contact our office and speak directly to a tax attorney, tax lawyer or former IRS agent to discuss the details of your case for the removal of FBAR penalties.

FBAR Penalties Explained

IRS has a very specific FBAR Penalty Structure

A civil money penalty may be imposed  by the IRS for an FBAR violation even if a criminal penalty is imposed for the same violation.  Yes, this is double the trouble. This can be found under 31 U.S.C. § 5321(d).
Negligence Penalties for FBAR

There are two negligence penalties which apply generally to all BSA provisions

1. A negligence penalty up to $500 may be assessed against a business for any negligent violation of the BSA, including FBAR violations.

2. An additional penalty up to $50,000 may be assessed for a pattern of negligent violations.

As a general rule these two negligence penalties only apply to trades or businesses, not to individuals.

The FBAR penalties under section 5321(a)(5) and the FBAR warning letter, Letter 3800, should be adequate to address most FBAR violations that are identified. The FBAR warning letter may be issued in the cases where the revenue agent determines none of the 5321(a)(5) FBAR penalties are warranted.Each case is based on its own unique set of facts and can significantly vary due to IRS swings in policy changes.

If the revenue agent ( RA) believes, however, that assertion of a section 5321(a)(6) negligence penalty is warranted in a particular case, the revenue agent should contact a Bank Secrecy Act Program Analyst for guidance.As a general rule, these apply to high dollar cases where the negligence appears more warranted.
Negligence that applies to FBAR.

Actual knowledge of the reporting requirement is not required to find negligence.

If a financial institution or non-financial trade or business exercising ordinary business care and prudence for its particular type of business should have known about the FBAR filing and record keeping requirements, failure to file or maintain records is negligent. Remember, reasonable cause for penalty abatement’s can be tested.

If the failure to file the FBAR or to keep records is due to reasonable cause, and not due to the negligence of the person who had the obligation to file or keep records, the negligence penalty should not be asserted. This is where you need a seasoned tax professional to help you with a situation just like this.

Negligent failure to file does not exist when, despite the exercise of ordinary business care and prudence, the business was unable to file the FBAR or keep the required records.

IRS will use general negligence principles in determining whether or not to apply the negligence penalty.

Although this IRS tax regulation does not apply to FBARs, the information it contains may still be helpful in determining whether the FBAR violation was due to reasonable cause and not due to negligence.

Remember the facts and circumstances differ on each case and no two cases are the same.

Call us if you have questions or need tax representation.1-866-700-1040