subject: Fbar, You And The Law [print this page] The Internal Revenue Service launched the Offshore Voluntary Disclosure Initiative that allows you to come clean and report all of your offshore accounts since 2003 if you have not filed the correct FBAR form so far. The first step in the process is submitting a completed TD F 90-22 and including copies of your previous tax returns for those years. The next step requires that you ignore the tax assessing time period for the IRS while they investigate your situation, meaning that you will not be protected by the statute of limitations for these years. You need to then pay any other penalties that you owe, up to and including 25% of the entire balance of all overseas accounts. Once you have paid all the penalties, taxes and fines you can then file a form to close out the case on Internal revenue service form 906. If you are presently under a civil or criminal case at this time you are not eligible for this program.
FBAR form are mandatory to be filed every year that you hold a financial interest in an overseas account. The penalties are brutal and can even end in prison time if you do not report accurately. The most common way to get in trouble with the FBAR form is to begin filing forms before considering older accounts, filing past due FBAR form in different envelopes in an attempt to evade notice or filing more than 8 different forms with letters explaining that you did not know you were required to file the FBAR form.
Regardless of your tax liability, you are still obligated to file the right FBAR Form within the filing deadline in order to get around penalties. Unless you enjoy serving prison time you should not attempt to get out of filing FBAR form. The rules for FBAR form and FBAR penalties can be confusing and difficult to navigate so it is essential to have high-quality representation when you begin this procedure so that you can make sure that you have complied with the current laws. If you have never filed before it is doubtful that you can stay below the radar forever, and once you are caught, the penalties are severe. Therefore, it is best to hire help and get the FBAR form filed and out of your way.
