subject: Fbar Penalty: Report It Correctly
[print this page] The Internal Revenue Service released the Offshore Voluntary Disclosure Program that enables you to come clean and report all of your overseas accounts since 2003 if you have not filed the correct FBAR forms yet. The OVDI required that you supply copies of your previous tax returns, and reconcile those returns as needed to file the full TD F 90-22. It also requires that as soon as this is complete you must sign documents that allow IRS to expand 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. You must then pay any other penalties that you owe, up to and including 25% of the total balance of all offshore accounts. Then, and only then, if you have reconciled all the penalties and taxes you owe, you can file a form 906 to close out the case. If you are presently involved in a civil or criminal case at this time you are not eligible for this program.
The FBAR forms need to be filed every year once you have started offshore accounts. Incorrect reporting may result in severe FBAR penalties that could put you in jail. Not filing past forms is the way that many people get into trouble with this type of process. They could also try to file more than one form at the same time by sending them individually, which is just as bad as not filing them at all. It is critical that you file with respect to the law in order to evade FBAR penalties.
Regardless of your tax responsibility, you are still required to file the correct FBAR Penalty within the filing deadline so as to get around penalties. Unless you like serving prison time you should not try to get around filing FBAR forms. Because the instructions and rules concerning the filing requirements are complicated it is suggested that you get professional guidance in order to evade harsh penalties. If you have never filed before it is unlikely that you can stay below the radar forever, and once you are caught, the penalties are brutal. Therefore, it is best to hire help and get the FBAR Forms filed and out of your way.
