Hopefully, Americans living abroad, or those who have foreign investments and assets, are familiar with FBAR regulations. Both groups are required to file a Foreign Bank Account Report every year so they can stay in compliance with the IRS. If you’re not familiar with this regulation, you need to find an FBAR lawyer right away.
Backed by the resources of the United States government, the IRS has the ability to find you no matter where you are in the world.
That’s why you need to schedule a consultation with Gordon Law Group’s FBAR lawyers to inform you of your rights.
Are You Required to File an FBAR?
Many people are required to file an FBAR on their foreign assets –even if you are living abroad and have retained your citizenship. You must also file taxes with the IRS every year. Tax obligations for Americans living abroad can depend on several factors. This can include the total amount of income generated and how much was withheld in the country in which you currently live.
The IRS Taxes Worldwide Income
The United States taxes all its citizens for any income they’ve generated — even if it comes from other parts of the world. This includes any rental income from foreign properties and income being from online businesses.
Whether the money comes from an international job or from a foreign asset, you must report it to the IRS. Living abroad and paying taxes to another country is not a valid excuse for not reporting income generated from foreign property and investments. That’s why you need to file an FBAR.
Penalties for Failing to File An FBAR
The government implemented the Offshore Voluntary Disclosure Initiative in 2011, and it has strict reporting requirements with regard to foreign accounts. It also has strict penalties for not reporting them every year. That’s why you need to file an FBAR if this applies to you
You must file an FBAR in the following circumstances:
- If you have a foreign bank account that has had a balance of $10,000 at any point during a calendar year
- If you have foreign tangible assets
Failing to do so can result in a fine of $250,000, five years in federal prison, or both. If you deliberately fail to file, you are also subject to a fine of $100,000 or 50% of the account balance.
Opportunities for Amnesty
Giving a valid explanation for a failure to file in some cases not filing might give you temporary amnesty, but it’s not guaranteed. This usually occurs after a long negotiation between a tax attorney, the IRS’s legal team, and other justice authorities.
There are two different types of disclosure methods — a noisy one and a quiet one. Providing a noisy voluntary disclosure can be effective in avoiding criminal prosecution. But if the IRS decides not to prosecute, it will need to do a thorough investigation. Many people believe the potential for being charged with tax fraud is low if they decide not to file an FBAR. This has led many of them to file quiet voluntary disclosures, but they can be treated more harshly should an issue arise.
The Risks of Filing An FBAR On Your Own
Many people file an FBAR once without dealing with other related problems, but not filing a voluntary disclosure can put you at risk of criminal prosecution for tax evasion.
The riskiest move is not filing at all. Some of these risks are:
- Back taxes
- Legal fees
You may also face:
- Additional penalties
Get The Protection You Need From Gordon Law
Because of the stiff penalties associated with not filing an FBAR, you should recruit the help of an FBAR lawyer.
If you don’t know if you need to file, or what you need to disclose, they will be able to help. If you are facing an audit or have already been penalized for not filing an FBAR, you need to seek the counsel of the Gordon Law Group.
Our attorneys have a great deal of tax litigation and criminal tax law experience, so we can advise you on everything associated with making a voluntary disclosure and filing an FBAR. If an IRS auditor contacts you, having someone with extensive experience on your side can be helpful. This person can work with IRS investigators, and their knowledge of tax law can move the odds in your favor. We know exactly what you should say in response to an IRS investigator’s questions. Contact us for a FREE CONSULTATION with an FBAR lawyer. You’ll be glad you did!