Our offices have handled many cases recently of foreign nationals and spouses with offshore accounts and assets who were not aware of their IRS FBAR reporting requirements. Unfortunately ignorance of IRS FBAR reporting is not a defense and the IRS is ruthlessly pursuing huge penalties and interest for those who the agency believes are claiming “willful blindness.” US tax laws and the IRS require all US taxpayers including foreign nationals who live and work in the United States to fully understand their tax filing and payment responsibilities. The failure to do so can result in draconian penalties and interest for unsuspecting US taxpayers.
For example, one client brought in a spouse from Europe who has been in the United States for several years. The spouse held several offshore bank accounts in their own name, and had signatory power on a few of their parent’s accounts. If the total offshore balance of your accounts exceed $10,000 at any point in any tax year you should contact Allen Barron and discuss your unique situation. If the balance of any single account exceeds $10,000, even if for only a day, you are required to prepare and file the IRS FBAR. Many taxpayers have attempted to simply apply under the Streamlined Domestic (Foreign) Offshore Procedures to come into compliance with FBAR reporting. There is no guarantee the IRS will accept a streamlined application, and this still does not release the taxpayer from the potential for criminal tax evasion charges.
The Offshore Voluntary Disclosure Program or OVDP provides the criminal release many taxpayers seek, but the penalties under this program are much higher. What is the right solution for your unique circumstances?
Ignorance of IRS FBAR reporting is not a defense before the IRS. We invite you to contact Allen Barron‘s experienced domestic and international tax attorneys for a free consultation at 866-631-3470. Gain peace of mind and the knowledge of your responsibilities as a US taxpayer and how to reduce your exposure to an IRS audit or the potential for criminal tax evasion charges.
