FBAR Penalties Could Be Lessened Under New IRS Guidelines
![](https://groco.com/wp-content/plugins/bb-plugin/img/pixel.png)
According to the IRS, “if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).”
In other words, anyone who has money in a foreign bank account that exceeds $10,000 at any time during a given year will need to report that income to the IRS via an FBAR. However, recently, the IRS issued some new guidance regarding the penalties for those who don’t file an FBAR. According to reports, the IRS released a statement that noted: “For each year for which it is determined that there was a willful violation, examiners must fully develop and adequately document in the examination work papers their analysis regarding willfulness.”
For any case that involves willful violation for several years, it is up to the examiner to recommend the penalty length for each year the violation was determined to be willful. The IRS stated that typically the total penalty for the combined years under examination would not exceed ‘50 percent of the highest aggregate balance of all unreported foreign financial accounts during the years under examination.”
Meantime, an examiner can recommend more or less than the 50 percent threshold, but the total penalty cannot “exceed 100 percent of the highest aggregate balance.” There are obviously many possible scenarios and each case will be treated separately on its own merits and circumstances. The bottom line is you should still report your FBARs each year and report them on time. If you need help planning for and filing your FBAR then contact GROCO today at 1-877-CPA-2006, or by clicking here.
IRS’s Direct Pay Service Is Gaining Popularity
Everyone seems to love things that are automatic. In fact, when it comes to financial transactions, cash is hardly ever involved anymore, these days, as everything happens with either swipes or pushing buttons. The same is true with taxes, including the popular e-file option for millions of taxpayers every year. It turns out getting your…
Federal Government Looking for Ways to Get to Retirement Funds
Just when you thought your retirement account was safe from the federal government, think again. That’s’ because according to the Government Accountability Office, there are around 9,000 U.S. taxpayers who have a minimum of $5 million in an individual retirement account. Now some lawmakers are taking a closer look at these accounts because as Senate…
An Artistic Way to Pay Your Taxes
Many wealthy individuals enjoy collecting things, including artwork. While artwork can be a source of income for some, as well as solely a collectible for others, it can’t be used it to pay your taxes. Well, at least not in the United States, anyways. However, there are some countries in which artwork is a completely…
Life Is Not Fair – Neither Is Every State Tax System
Life Is Not Fair – Neither Is Every State Tax System We all know that life isn’t fair, and that means that many specific aspects of life aren’t fair either. Of course, according to most people taxes always fall into the unfair category as well. So just how fair or unfair are your taxes? No,…