We are very pleased and excited to announce that we have just created our first prezi presentation! You can view it here.
Given that we concentrate so much of efforts on FBARs, FATCA, offshore bank accounts and foreign reporting, it’s fitting that our first interactive presentation is titled FBAR Basics – Foreign Reporting 101.
Please note, this post was written in 2013. Although we are allowing the post to remain, FBAR reporting is now electronic and does not involve paper filings. Other changes may have occurred as well. We urge readers to always consult with an experienced lawyer or accountant when reporting offshore financial assets.
Mahany Law no longer handle offshore tax matters except whistleblower actions brought to report suspected tax cheats. Cash rewards are available from the IRS Whistleblower Program. Contact us for more information.
FBAR Basics – (Foreign Reporting 101)
Step 5: The Fine Print
Step 4: Amnesty
Like every IRS program, there are exceptions to the exceptions to the rules! This presentation is intended as general information only and is not “legal advice.”
The penalties for missing FBARs are huge but the problem can often be fixed with little or no penalty.
Questions? Call us for a free consultation. Brian Mahany, Esq (202) 800-9791
Need More Info?
See our Due Diligence blog at www.mahanyertl.com
IRS offers an amnesty program called OVDP – Offshore Voluntary Disclosure Program which offers reduced one time penalty, no audit, no jail.
Special programs also available for small accounts (<$75,000), ex pats and others.
If you are missing one or more years of FBARs, consult with a tax attorney.
Step 3: Penalties
Step 2: How to Report
Willful Failure to File an FBAR is a felony (up to 5 years in prison)
Willful Failure to File an FBAR has a civil penalty of greater of $100,000 or 50% of the highest account balance for each year an account was unreported.
Negligent violations can incur civil penalty of $10,000.
Penalty waivers sometimes given
Foreign Accounts Generally Reported on a Report of Foreign Bank and Financial Account (FBAR) and:
- Schedule B of income tax return
- Form 8938 (FATCA form)
Step 1 (summary)
FATCA Form 8938
- TD F 90-22.1 formal name of FBAR
- not filed with tax return
- must be filed by June 30th
- no extensions
FATCA and FBAR reporting have many overlaps but the criteria is different. This presentation does not include FATCA form.
The FATCA form, if required, is part of the income tax form
Foreign Accounts also reported on Schedule B of individual income tax form (Form 1040)
An FBAR is required if you are a:
- US Taxpayer with an
- interest in or signature authority over a
- financial account(s)
- located in foreign country with an
- aggregate value >$10,000
Financial Account includes:
US Taxpayer Includes
- Foreign bank account or CD
- Foreign stock if held in foreign institution
- Foreign life insurance or annuity w/ cash value
- Foreign currency or precious metals if held in foreign acct
Financial Account does NOT include:
Financial Account might include
- US Citizen
- Dual National US Citizen
- Resident Alien (green card holder)
- US citizen residing overseas (expat)
- Foreign Hedge Funds
- Indirect interests in foreign financial assets
- Account at U.S. branch of foreign bank or institution
- Foreign Real Estate
- Foreign Currency held directly
- Foreign “Social Security” type programs
- Foreign Partnership Interests
- Foreign Stocks you hold directly (not in account)