subject: Fbar: Reporting It Or Leave It Alone [print this page] In an attempt to supply a way for unfiled reports to be filed the IRS announced the Offshore Voluntary Disclosure Initiative that permits US persons to report all of their foreign accounts since 2003 by filing the correct FBAR Forms. The OVDI required that you supply copies of your earlier tax returns and amend those returns as necessary to file the full TD F 90-22. The next step demands that you waive the tax assessing time period for the IRS while they explore your situation, meaning that you will not be sheltered by the statute of limitations for these years. The FBAR penalties can add up to as much as 25% of the aggregate balance of all your offshore accounts. Once you have paid all the penalties, taxes and fines you can then file a form to close out the case on IRS form 906. If you are currently involved in a civil or criminal case at this time you are not eligible for this program.
FBAR forms are required to be filed each year that you hold a financial interest in an offshore account. The penalties are ruthless and can even end in prison time if you do not report correctly. The most ordinary way to get behind with the FBAR forms is to start filing forms going forward without addressing past accounts, filing overdue FBAR Forms in separate envelopes in an effort to evade attention, or submitting more than 8 different forms with letters explaining that you did not know you were required to file the FBAR Forms.
Despite the consequences of your tax liability, you are still obligated to file the correct FBAR forms within the filing deadline in order to get around filing anchor. You should never try to get out of filing these forms unless you are ready to risk significant consequences that might include prison. The regulations for FBAR forms can be confusing and difficult to navigate, but it is important to have competent representation when you start this process in order to remove any doubt over whether or not you have understood the current laws. If you have never filed before it is doubtful that you can stay under the radar forever and once you are caught, the penalties are severe, so it is best to find help now and get the FBAR Forms filed and out of your way.
