subject: Are You Effectively Informed Of Your Fbar Tax Options
[print this page] The Internal Revenue Service launched the Offshore Voluntary Disclosure Initiative that enables you to come clean and report all of your offshore accounts since 2003 if you have not filed the right FBAR forms yet. The initial step in the process is submitting a completed TD F 90-22 and including copies of your previous tax returns for those years. It also demands that as soon as this is completed you must sign documents that permit IRS to widen the tax assessing time period, pay 20% tax penalty on all underpayments for all years, and pay failure to file and failure to pay penalties. The FBAR penalties can be as much as 25% of the combined balance of all your offshore accounts. As soon as you have paid all the penalties, taxes and fines you may then file a form to end the case on Internal revenue service form 906. However, if you are experiencing criminal or civil investigation you are not eligible to participate in the OVDI program.
The FBAR forms have to be filed every year as soon as you have started foreign accounts. The penalties are harsh and can even end in prison time if you do not report accurately. The most common way to get in trouble with the FBAR forms is to begin filing forms without addressing previous accounts, filing past due FBAR Forms in different envelopes in an attempt to evade notice or filing more than eight separate forms with letters explaining that you did not know you were required to file the FBAR Forms.
Regardless of your tax liability, you are still obligated to file the correct FBAR Tax within the filing deadline so as to evade penalties. You must never try to get around filing these forms unless you are ready to risk serious penalties that include prison. The rules for FBAR forms and FBAR penalties might be confusing and tricky to understand so it is vital to have high-quality representation when you begin this process so as to make sure that you have complied with the current laws. Because of the attention on foreign accounts, it is improbable that you will be able to remain hidden if you have never filed a FBAR in the past. With the OVDI, it is best that you report all that you have at this time in an attempt to avoid future tax issues.
