Foreign Bank accounts over $10,000? US Citizens are required to file a FBAR

Where ever you live in the world, if you are a US citizen and you have foreign bank accounts whose balances exceeded $10,000 any day of the past year, you are required to file a FBAR (Foreign Bank and Financial Account Report). You are legally required to file a FBAR before June 30th in the year following the calendar year being reported.

What if you haven't filed an FBAR for a very long time? There are three approaches:

Just file them - If you haven't been contacted by IRS and you have already reported any income associated with the accounts on your returns, your best bet is to simply file your FBARS with your trusted FBAR-filer. When submitting the FBARS - you or your FBAR- filer will give an explanation of why you filed late to avoid penalties - most commonly - "ignorance of the law." Simply filing the returns - might be the best approach but you might also consider...

The "Streamlined process" (waiver of penalties, but doesn't close door on criminal prosecution). With the streamlined process, first offered in 2012, you show the IRS that there's no willful conduct. In this procedure, you don't pay a penalty if you are overseas and a limited penalty if you live in the U.S. However - this program seems a bit over-glorified and quite complex.

OVDP program (to avoid criminal prosecution)
If you not only didn't file FBARS but failed to report interest or dividends from these accounts on your 1040 tax returns: you should probably come clean thru the OVDP (Offshore Voluntary Disclosure Program) whereas you disclose the fact on not filing FBARS AND not reporting the income and you avoid criminal prosecution in your presentation. Your FBARS and amended returns get submitted together with a request for leniency, etc.

You can reach our tax experts directly by calling or emailing:
Portrait of Jay Freeborne
Jay Freeborne
Enrolled Agent and Tax Resolution and Compliance Expert
(866) 525-7302 or [email protected]
Portrait of Stephanie Johnston
Stephanie Johnston
Enrolled Agent, Tax Resolution & Expat Expert
(866) 525-7321 or [email protected]

Is 2024 the year to solve your tax issue? WATAX is ready to assist you now. Please call us at 1-888-282-4697 or email us a description of your tax issue and we'll contact you promptly.

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