The IRS has reported that the number of “Report of Foreign Bank and Financial Reports” or FBARs filed in 2015 is up by more than 8 percent over 2014. A staggering 1,163,229 FBARs were filed with the IRS, continuing the trend of an increasing number of US taxpayers filing the report over the past five years. The question is simple:
If more than a million FBARs have been filed for 2015, and statistics released by the IRS itself showed less than 90,000 applications for voluntary disclosure as of late last year, what is the status of the other 900,000+ taxpayers?
Are there more than 900,000 US taxpayers who should be filing a voluntary disclosure to the IRS through the advice and counsel of Allen Barron’s expert international tax attorneys? As a seasoned tax attorney I am constantly amazed by the number of sophisticated offshore investors I meet, professionally and socially, who have not heard of an FBAR. We were recently at a dinner table of 8 world travelers, most of whom had substantial offshore investments. None of them had heard of an FBAR and the IRS’ requirement to come into compliance with FBAR and FATCA requirements through a voluntary disclosure.
Who is Required to File a “Report of Foreign Bank and Financial Report” or FBAR? Any US person (resident, citizen, entity, taxpayer) who held signatory authority or other control over a foreign bank account(s), investment account(s) or asset(s) whose total value exceeded $10,000 at any point in 2015. Even if the accumulated total was $10,001 for one day, you are still required to file an FBAR.
Tomorrow we will discuss the second implication of the increased number of FBARs Filed in 2015 : voluntary disclosure, and the draconian penalties US taxpayers face for the failure to update previous tax years returns and FBARs and fully disclose offshore assets and income.
If you are a US person (individual or business per the IRS’ definition) or taxpayer with offshore bank accounts, investments or assets and have questions about your tax returns and FBAR issues, we invite you to contact us for a free and substantive consultation at 866-631-3470. Learn about the protections of the attorney-client privilege and your responsibility and financial incentive to come into compliance with FBAR reporting to the IRS.