subject: Is It Time You Came Clean With Fbar Forms
[print this page] The Internal Revenue Service introduced the Offshore Voluntary Disclosure Program that enables you to come clean and report all of your offshore accounts since 2003 if you have not filed the right FBAR forms so far. The initial step in the process is submitting a completed TD F 90-22 and including copies of your earlier tax returns for those years. It also demands that once this is done 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 have to then pay any other penalties that apply up to and including 25% of the total balance of all 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 involved in criminal or civil investigation you are not eligible to take part in the OVDI program.
FBAR forms are necessary to be filed each year that you hold a financial interest in an overseas account. Improper reporting may result in severe FBAR penalties that may possibly put you in jail. The most common way to get in trouble with the FBAR forms is to start filing forms without addressing older accounts, filing past due FBAR Forms in separate envelopes in an effort to evade attention or filing more than eight different forms with letters explaining that you did not know you were required to file the FBAR Forms.
Despite your tax liability, you are still required to file the correct FBAR within the filing deadline in order to avoid penalties. You should never try to get around filing these forms unless you are ready to risk serious penalties that involve prison. Because the guidelines and rules concerning the filing requirements are complex it is recommended that you acquire professional guidance in order to avoid severe penalties. If you have never filed before it is doubtful that you can stay below the radar eternally, and once you are caught, the penalties are harsh. Therefore, it is best to hire help and get the FBAR Forms filed and out of your way.
