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FBAR Penalties | Failure to File

33-must-know-questions-FBARHave you recently discovered you have a FBAR filing requirement? Did you know that the IRS can inflict harsh penalties for noncompliance even if you didn’t know you had a filing requirement? Freed Maxick can help navigate the complexities of your FBAR filing requirements and address potential penalties.

There are two types of penalties applicable to FBARs – (1) Non-Willful and (2) Willful.  It should be noted that the penalties are assessed per account and not per FBAR. Additionally, the penalties are assessed for each year there is a violation. For example, if you have 5 accounts that have not been reported for 5 years, there could be 25 separate penalties assessed. The penalty regime for violations after October 22, 2004 can be summarized as follows:

Non-Willful Penalty

•     Up to $10,000 for each negligent violation

•     No Criminal Penalties Assessed

Willful Penalty

•     Up to the greater of $100,000 or 50% of the amount in the account at the time of the violation

•     Criminal Penalties of up to $250,000 or 5 years in jail or both

Willful Penalty While Violating Certain Other Laws

•     Up to the greater of $100,000 or 50% of the amount in the account at the time of the violation

•     Criminal Penalties of up to $500,000 or 10 years in jail or both

While the penalties can be overwhelmingly high, there have been a host of Voluntary Disclosure Programs offered by the IRS that can potentially reduce or even eliminate the penalties noted above. Freed Maxick’s International tax team can help identify these programs to address your issues.

Next Steps
Please contact a member of our International Tax team.  Freed Maxick, can assist in assessing FBAR filing requirements, assimilating the necessary information and preparing your current and past due FBARs. We have helped many taxpayers navigate through the OVDI program with no penalties.

Related Links
Canadian | U.S. Tax Compliance | Cross Border
Expatriate Consulting Services
Expatriate Tax Planning
Foreign Bank Account Reporting | FBAR
International Corporate Tax Services
International Tax Compliance
International Tax Structuring
Passive Foreign Investment Company | PFIC | Services
Transfer Pricing Studies | Analysis
U.S. Tax Services for Canadians

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ABOUT US: Freed Maxick CPAs, P.C. is Western and Upstate New York’s (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides audit, tax and consulting services to closely-held businesses, public (SEC) companies, not-for-profits and governmental entities in Buffalo, Rochester, Syracuse, Albany and NYC, New York.