Foreign Bank Account Reporting
FBAR Compliance and Offshore Account Issues
If you have foreign bank accounts or offshore assets, you have specific reporting requirements. Axio Tax Relief helps ensure compliance and resolves reporting issues.
Understanding FBAR Requirements
The Foreign Bank Account Report (FBAR) is a filing requirement for U.S. persons who have financial interests in or signature authority over foreign financial accounts when the aggregate value exceeds $10,000 at any time during the calendar year.
FBAR is filed separately from your tax return using FinCEN Form 114. The report must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) by April 15th following the calendar year being reported, with an automatic extension to October 15th.
Many U.S. taxpayers with foreign accounts are unaware of this requirement or don't understand that it applies to them. Failing to file FBAR when required can result in severe penalties, even if the failure was unintentional and no taxes are owed.
Beyond FBAR, there are additional reporting requirements for foreign assets through Form 8938 (Statement of Specified Foreign Financial Assets), which is filed with your tax return. Understanding which forms you need to file and ensuring compliance is critical to avoiding penalties.
Who Must File an FBAR?
You must file an FBAR if you meet ALL of these criteria:
- U.S. Person: U.S. citizens, residents, corporations, partnerships, LLCs, trusts, and estates
- Financial Interest or Signature Authority: You own foreign accounts or have authority to control them
- Aggregate Value Exceeds $10,000: The combined value of all foreign accounts exceeded $10,000 at any point during the year
Important: The $10,000 threshold applies to the aggregate (total) of all your foreign accounts. Even if no single account exceeds $10,000, you must file if the combined total ever exceeded $10,000.
Severe Penalties for Non-Compliance
Penalties Can Be Devastating
FBAR penalties are among the most severe in the tax code and can quickly exceed the value of your foreign accounts:
- •Non-Willful Violation: Up to $10,000 per year for unintentional failure to file
- •Willful Violation: Greater of $100,000 or 50% of account balance per year
- •Criminal Penalties: In serious cases, willful failure to file can result in criminal prosecution, fines up to $250,000, and up to 5 years in prison
These penalties can accumulate for each year of non-compliance, making early resolution critical.
Voluntary Disclosure Programs
Streamlined Filing Compliance Procedures
For taxpayers whose failure to file was non-willful, the Streamlined Procedures allow you to become compliant by filing amended returns and FBARs for the past three years with reduced or eliminated penalties.
Delinquent FBAR Submission Procedures
If you don't owe any tax but failed to file FBARs, you may qualify to file delinquent FBARs without penalties if you meet certain requirements.
Delinquent International Information Return Submission Procedures
For those who failed to file other required international information returns (like Form 8938), this procedure allows you to submit delinquent forms and avoid penalties.
How Axio Tax Relief Can Help
FBAR Preparation and Filing
We prepare and file accurate FBARs for current and prior years to bring you into compliance.
Voluntary Disclosure Assistance
We guide you through voluntary disclosure programs to minimize or eliminate penalties for past non-compliance.
Form 8938 Compliance
We prepare Statement of Specified Foreign Financial Assets and ensure compliance with all international reporting requirements.
Penalty Mitigation
We work to reduce or eliminate FBAR penalties through reasonable cause arguments and voluntary disclosure programs.
Don't Wait—The Risks Are Too High
If you have unreported foreign accounts, the penalties grow more severe with each passing year. The IRS has sophisticated methods for detecting foreign accounts, and the consequences of discovery can be financially devastating.
Voluntary disclosure before the IRS discovers your accounts is always better than waiting. Contact Axio Tax Relief today to discuss your options confidentially.
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