June 30, 2016, FBAR Filing Deadline Is Quickly Approaching

June 30, 2016, FBAR Filing Deadline Is Quickly Approaching

Expats, recent immigrants, investors, and travelers understand that foreign accounts, investments, and other assets can be held for an array of reasons. In some cases, foreign accounts are kept for purposes of convenience. In other cases, foreign accounts serve as a conduit for remittances to family members living abroad. In still other situations, foreign assets, and accounts are held to diversify one’s holdings. Still other reasons to hold foreign accounts and assets exist. However, holding offshore accounts and offshore assets triggers certain responsibilities. For one, American taxpayers are required to pay taxes on income received from most foreign sources on an annual basis. Additionally, a number of disclosure obligations including filing a Report of Foreign Bank Accounts (FBAR) is required for most holders of foreign accounts.  

California tax attorney Robert Hoffman can help U.S. taxpayers comply with all foreign tax payment, reporting, and disclosure obligations. The Hoffman Law Offices are located in Marina del Rey, California and serve all individuals in Los Angeles and Orange Counties. To schedule a confidential consultation, call 800-897-3915 today or contact the Hoffman Law Offices online.

Most Taxpayers with Foreign Assets Have an Obligation to File FBAR

The simple fact of the matter is that most U.S. persons holding foreign assets are required to file FBAR. This is because the filing threshold that triggers this obligation is extremely modest. In fact, just $10,000 in aggregate accounts and assets gives rise to an FBAR filing duty. This includes accounts where the individual has a financial interest or signature authority over the account.

When Is an FBAR Disclosures Due? Can I File for An Extension?

This year’s FBAR filing deadline is set for June 30, 2016. While many people hold the belief that it is possible to file for an extension of time like they do on their taxes, the reality is quite different. Unfortunately, there is no mechanism to file for an extension of time to file the offshore disclosure. Individuals who do not submit their filing by the June 30 deadline are in violation of the law and subject to penalties even if their failure to file was accidental.

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How can I Satisfy my FBAR Obligation?

Individuals who wish to file their FBAR and avoid the substantial penalties that can be imposed for a non-disclosure, can only file their FBAR online. There is no method available to file an FBAR on paper by mail. Rather, individuals must log on to the FinCEN portal and complete FinCEN Form 114 online. However, do not mistake the online filing method for informality or a lack of seriousness. FinCEN Form 114 requires an extensive and detailed disclosure of accounts and assets. Furthermore, the form is filed under the penalty of perjury. Therefore, incomplete disclosures, misleading disclosure, or other errors can result in serious penalties.

What Penalties Can I face for a Failure to File FBAR?

Even an accidental failure to file FBAR can be punished by a fine of up to $10,000. This fine can be imposed for each year where a filing was required but did not occur. While this penalty is severe, penalties for an intentional or voluntary failure to file are much worse. Penalties for a willful failure to file FBAR can be assessed at the greater of $100,000 or 50% of the account balance. A willful failure to file FBAR is often accompanied by other tax charges.

Can I Fix Unfiled FBARs with OVDP?

Many people have heard that they can fix unfiled FBARs with Offshore Voluntary Disclosure or Streamlined Disclosure. This is typically accurate, however, there are some important caveats. To start, if you come under investigation prior to filing for a voluntary disclosure, you are ineligible for the programs. Second, the programs provide different benefits and an individual should consult with a tax attorney prior to taking any steps to enter into OVDP or the Streamlined Program. In short, individuals who are concerned regarding potential willfulness or other crimes should only engage in standard OVDP because the Streamlined Program does not provide any presumption of protection. However, the OVDP program does carry a higher offshore penalty and more onerous filing and disclosure requirements. Working with an attorney can help you decide which program is more responsive to your foreign disclosure concerns.


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California Tax Attorney Can Assist with FBAR Compliance Concerns

Of course, it is always best to maintain compliance with FBAR and other foreign disclosure requirements. Attorney Robert Hoffman can help you maintain your compliance. However, the June 30, 2016, filing deadline is rapidly approaching. To discuss how the Hoffman Law Offices can assist with your FBAR and foreign disclosure obligations call 800-897-3915 today.

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