Category Archives: FBAR

FBAR Delinquency: Jail Sentence For Swiss Account “Tax Dodger”

FBAR delinquency lawyerThis year, The IRS and SEC are on the lookout for FBAR delinquency cases. If you have overseas accounts or assets totaling more than US $10,000, connect with an FBAR lawyer. Failing to file now could evolve into a massive legal hassle later.

Authorities Recently Threw A Man In Jail Over FBAR Delinquency

Some people walk a fine legal line by hiding foreign financial holdings.

It’s not wise.

Take, for example, this recent case out of Connecticut. The Department of Justice slapped a “sophisticated business executive who ran family businesses with operations in the United States and internationally” (whom we’ll call “Tim”) for FBAR violations.

Originally from Korea, Tim had been living in New England for years but stashed $28 million of inheritance money in offshore accounts. Ostensibly a fan of conspicuous jewelry and lavish homes, according to authorities, Tim “conspired with a host of foreign enablers to conceal his assets and income in Swiss accounts held in his name, the name of a relative, and in the names of sham corporate entities.” Authorities also accused Tim of structuring “financial transactions in a manner that allowed him to utilize [offshore] funds in the United States while concealing his ownership and control.”

Well, the law caught up with Tim, and now he has to spend six months behind bars and pay a $14 million penalty.

Do You Have Foreign Holdings That Exceed $10,000?

People with foreign assets equaling or exceeding $10,000 should find an FBAR tax lawyer pronto. This year, the U.S. Department of Justice seems keen to uncover undeclared offshore holdings — including cryptocurrencies. So, if you’ve neglected your Foreign Bank Account — or have been lax with previous years’ calculations — it’s time to square things away. We can handle it for you and prepare a position that keeps dollars in your pocket.

Contact An FBAR Lawyer Who Can Help You Overcome Any FBAR Requirement Woes

The Gordon Law Group has years of FBAR experience. We know all the ins-and-outs of foreign disclosures; moreover, we’re skilled at crafting money-saving, tailor-made tax positions. If you have previously unreported international holdings, don’t worry. Our FBAR tax law team has successfully negotiated favorable settlements for people in myriad situations that, at first, seemed dire.

But don’t wait. The time is now to clear up any tax matters — including FBAR requirements.

Let’s start the conversation by exploring your options. Get in touch today!

Disclosing Foreign Assets To The IRS [Infographic]

Individuals and businesses must report foreign financial interests — (i.e., bank accounts, securities, brokerage accounts, mutual funds, etc.) — to the IRS annually.

Disclosing foreign assets to the IRS


Disclosing Foreign Assets

United States tax laws require U.S. citizens and permanent residents to disclose foreign assets if a parties’ combined holdings exceed $10,000 at any time during the tax year. Assets are typically reported along with annual tax returns via an FBAR, or Report of Foreign Bank and Financial Accounts.

FBAR penalties start at $10,000 per return. When the IRS notifies parties of filing delinquencies, taxpayers have 90 days to file and pay up. If a taxpayer doesn’t respond within 90 days, an additional $10,000 per month is imposed on each outstanding return, triggering civil penalties that can reach a maximum of $50,000 per return. Inaccurate returns may incur penalties of 20% to 40%. Wilful failure to submit FBARs can result in civil penalties up to 75% of the unpaid tax. Taxpayers who don’t file annual tax returns are subject to audits, as well as increased penalties.

The Offshore Voluntary Disclosure Program

The IRS developed the Offshore Voluntary Disclosure Program (OVDP) to help taxpayers who owe penalties on foreign accounts. The program focuses on taxpayers who may face substantial fines or criminal charges due to willful failure to report foreign financial assets and remit proper taxes.

Reporting foreign financial holdings can be complex, especially when a taxpayer has multiple accounts. To address common concerns, the IRS published a list of ODVP questions and answers that provides valuable information on the program. The IRS encourages taxpayers to use the ODVP to get compliant.

We Help People Overcome Foreign Tax Obstacles

Our firm has been representing OVDP participants for years. We know all the ins-and-outs and how to deal with the IRS.

Tax issues are stressful, but we know how to alleviate the pressure and get you compliant.

Get in touch today to start exploring your options. The consultation is on us.

Hiding Assets From The IRS: Criminal Consequences

hiding assets from the IRS - lawyer adviceAuthorities can file criminal charges against individuals who are hiding assets from the IRS, don’t file tax returns, file false returns, and otherwise evade taxes.

Hiding Assets From The IRS: FBAR

Under U.S tax laws, parties must report overseas bank accounts, brokerage accounts, securities, mutual funds, and other foreign accounts. The procedure is known as FBAR, and you can read more about it here. Be aware: failure to file FBAR documentation can result in gigantic fines and a 10-year prison sentence.

Hiding Assets From The IRS:Violations and Punishments

Hiding Assets From The IRS: Achieving Compliance Through OVDP

Reporting foreign financial interests can be a complex process, especially when juggling multiple accounts. Thankfully, via the Offshore Voluntary Disclosure Program (OVDP), the IRS offers tax assistance to parties who owe penalties on foreign assets.

In short: program participants can reduce fines, avoid criminal charges, and come clean.

Let’s Chat About How We Can Help You

Do you need to clean up some back tax issues? We know the process seems daunting, but we’ve helped countless other people get over the hump, and we can do the same for you. In many cases, people end up owing a lot less than they think.

The key is to just jump in and get it done. The water is more tolerable than you think.

Get in touch today to begin the conversation. The consultation is on us.

What Civil Penalties Might Apply If I don’t Disclose My Foreign Assets And The IRS Examines Me?

FBAR attorney in Chicago Illinois

Failure to file an FBAR (Foreign Bank Account Report) can cost a pretty penny. Even if the IRS unearths unintentional violations, it can still smack you with penalties.

Hire An FBAR Attorney To Help With International Tax Reporting

Under United States tax laws, expats, permanent residents, and citizens associated with overseas financial holdings — whether directly or indirectly — must submit documentation to the IRS if the amount is equal to or over $10,000 at any time during the year.

A person who willfully fails to file an FBAR faces penalties up to $100,000 or 50 percent of the total balance in foreign accounts.

In 2011, the U.S. started imposing penalties on taxpayers for willful nondisclosure of foreign accounts, including bank accounts, mutual funds, brokerage accounts, securities, and other international assets.

Once the IRS notifies a taxpayer of delinquency, he/she has 90 days to pay up. If its not paid within 90 days, an additional $10,000 per month is imposed per item, maxing out at $50,000 per return.

FBAR filings can be complex, especially if a person has varied financial interests. An FBAR attorney can make sure you file timely, accurate tax returns.

What can happen if you don’t use a tax lawyer to sort through complicated matters? To give you an idea, the IRS can smack you with a 20% to 40% fine. In the case of fraud, that percentage can scream up to 75%.

The Offshore Voluntary Disclosure Program

The Offshore Voluntary Disclosure Program (OVDP) is an IRS program designed to help taxpayers who owe back taxes on foreign accounts and may be eligible for reduced penalties. OVDP protects participants from criminal liability.

In 2014, authorities modified the OVDP. As a result, taxpayers who submitted OVDP paperwork before 2014 may be able to have their cases reconsidered. For case reviews, taxpayers must request a review in writing.

Taxpayers with undisclosed foreign assets should use the OVDP to avoid substantial penalties or criminal prosecution. Moreover, parties that don’t submit voluntary disclosures are likely to catch an audit.

Tax Evasion and Criminal Charges

In addition to civil penalties, the IRS can bring criminal charges for failing to file tax returns, filing a false tax return, and tax evasion. Taxpayers convicted of criminal charges can face serious consequences.

The Consequences of FBAR Non-Compliance

contact an FBAR attorney in Chicago about your situationOffshore account holders who fail to comply with Foreign Bank and Financial Accounts Reporting (FBAR) regulations could face massive fines and even prison time. The IRS is warning anyone with financial interests in, or signature authority over, overseas accounts valued at $10,000 or more to disclose before it’s too late.

In 2010, lawmakers passed the Foreign Account Tax Compliance Act (FACTA), which requires foreign governments and banks to hand over identifying information about depositors. More than 100 countries are on board, which means the days of brushing foreign assets under the carpet are over.

Penalties for Not Coming Clean with the IRS

The consequences of not complying with FBAR laws can be significant. Those who fail to disclose foreign assets could face:

Options for FBAR Compliance

Complying with disclosure regulations can be intimidating — especially for folks with past issues. But never fear, you have options!

Offshore Voluntary Disclosure Program (OVDP)

While the penalties associated with the OVDP can be steep (up to 50% of the account’s highest value), they’re still better than willfully failing to disclose foreign assets. Plus, those who participate can receive amnesty from criminal prosecution. This program is not available to those who are already under investigation.

Streamlined Program

Easier and less expensive, the Streamlined Program is available to individual taxpayers who can certify that their noncompliance was not willful. Like the OVDP, individuals who are already under investigation are not eligible.

Who Needs To Be Concerned About Foreign Disclosures?

The Internal Revenue Code requires individuals and business to report foreign holdings. Failing to comply may result in serious criminal and civil penalties.

The Internal Revenue Service administers the Offshore Voluntary Disclosure Program, through which parties can avoid criminal liability by reporting previously undisclosed accounts. An experienced OVDP attorney can help you avoid criminal penalties and work to reduce civil penalties.

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Foreign Disclosure of Interest — OVDP attorney infographic


Report of Foreign Bank and Financial Accounts

Individuals and businesses with signatory authority or financial interest over foreign bank accounts are required to file the Financial Crimes Enforcement Network Form 114 — the Report of Foreign Bank and Financial Accounts, or FBAR.

People with foreign accounts over $10,000 or more during any portion of the year are required to report their interests via the form. The potential penalties for failing to do so are severe.

The Disclosure Responsibility

Authorities require signatory parties of foreign holdings to report it using Schedule B of the 1040 income tax return (part III, line 7a). Then, they must fill out Form 8938 where they disclose the account’s balance along with additional information if the total balance exceeds $50,000 or more on the last day of the year.

If an account is greater than $75,000 on any day during the year,  the IRS requires Form 8938, even if the balance is lower than $50,000 on the final day. People who don’t check the appropriate box and submit the required forms on time may incur serious penalties.

Potential Penalties

Failures to file the required FBAR and additional forms may result in penalties that depend on whether the failure is deemed to be willful or non-willful. The civil penalties for violations that are non-willful include the following:

Willful violations may bring fines of up to $100,000 or 50 percent of the aggregate values of the foreign accounts in addition to the interest, back taxes and accuracy penalties. Authorities can bring both criminal and civil charges against violators. When businesses do not report their interests, the IRS may hold the owners responsible.

Resolving the Reporting Problem with the Offshore Voluntary Disclosure Program

The IRS offers the Offshore Voluntary Disclosure Program to parties that have violated FBAR and other foreign disclosure requirements. Participants, for the most part, are protected from criminal prosecution. However, the IRS can assess eight years of tax data rather than the statutorily allowed six years. An OVDP attorney may help them with obtaining lower penalties for every year in which a violation occurred.

Opting Out of the OVDP

If the violations were not willful, some taxpayers may opt out of the OVDP. If you’ve not had criminal tax convictions in 10 years or have had previous FBAR problems, an attorney might be able to help mitigate penalties. Though, money in the foreign bank accounts must not have come from criminal sources or activities. Additionally, taxpayers who incurred penalties for under-reporting incomes may face higher hurdles. Finally, people who opt out of the OVDP must cooperate with the IRS.

Other Options

Thinking of ignoring the foreign disclosure requirement? We urge you to reconsider.

The IRS is keen to uncover foreign bank accounts. Some taxpayers might make quiet disclosures by filing amended returns for prior years, but doing so may leave them vulnerable to criminal prosecution.

Failing to report interests in foreign bank accounts may lead to severe civil and criminal penalties. The OVDP might help to protect some taxpayers from criminal prosecution while simultaneously reducing penalties. An experienced OVDP attorney can advise clients on OVDP options.

When Do You Have To File An FBAR?

Understanding FBAR

Congress passed the Bank Secrecy Act in 1970, and the Foreign Accounts Tax Compliance Act in 2010. These laws require US citizens with foreign bank accounts, mutual funds, or trusts to file disclosures with the Financial Crimes Enforcement Network (FinCEN), a division of the US Department of the Treasury. These reports must be filed annually.

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infographic_When Do You Have To File An FBAR


The law requires US citizens or residents with $10,000 or more in foreign assets, at any time during the year,  to file via the BSA E-Filing System. Under the current regulations, there is a six-year statute of limitations on FBAR filings.

FinCEN’s allows third parties, including FBAR attorneys, to file on clients’ behalf.

File An FBAR: Exceptions

FBAR exceptions exist. Certain jointly owned foreign financial accounts, most US military banking accounts, Nostro accounts, and qualified IRA plans, for example, aren’t subject to FBAR reporting requirements. Plus, individuals with supervisory and signature authority, but no financial interest in the account, are exempt.

Businesses and FBAR Requirements

The law requires certain individuals and businesses with indirect ownership of foreign accounts to file FBAR’s every year. These include:

Expats and Foreign Earned Income Exclusion

Expats or citizens working outside the US are also required to file an FBAR even if they qualify for foreign earned income exclusions or tax credits. For 2017, the threshold for foreign earned income exclusion is $102,100. Affected parties earning more must pay US federal income taxes on the amount earned above the threshold.

Need To File An FBAR?

Do you need to file an FBAR? If so, we can guide you through the process and handle all the paperwork.