The difference between a determination of “willful” versus “non-willful” conduct by the IRS is the difference between a 50% penalty calculation and potentially a 5% penalty for FBAR violations. There are thousands of US taxpayers who are not in full compliance with US Law and IRS guidelines for reporting foreign bank accounts and income via the FBAR and other IRS forms. The question from the perspective of the IRS is “did the taxpayer willfully intend to avoid paying US income taxes, and commit a criminal act(s) to do so?” The IRS is offering a limited window, August 15, to allow US taxpayers to come into compliance in regards to their foreign accounts and assets. Non-willful conduct is a matter of oversight, calculation errors, or non-negligent misunderstanding of the laws and guidelines. If you act immediately, and take advantage of the IRS’ OVDP program, you could wipe the slate clean by coming into compliance, and if you qualify for the new streamlined guidelines, pay a 5% penalty and be done. If the IRS has to come to you, (and they will in all likelihood have the data to do so after July 1 of this year) they are going to assume you were “willfully” attempting to shield assets and income, and the penalties for doing so are 50% of the highest aggregate value of all of your accounts and assets at any point over the past 8 years, AND, you will face exposure to criminal tax evasion charges and consequences. So: 3 years or 8? 5% or 50%? Criminal charges or not? What is in the balance financially is a large sum for most FBAR clients. How much is it worth to avoid criminal charges?
Call us at 866-631-3470 for a confidential and complimentary initial consultation. Your information will be protected by attorney-client privilege and we will discuss how to bring you into compliance and save you thousands of dollars in the process.
