In the campaign for greater compliance with tax laws, the Internal Revenue Service (IRS) has initiated a major crackdown on all delinquent taxpayers and tax violators both locally and internationally. One particular area that has gotten much attention in recent years is the issue of offshore accounts that apparently have been chiefly instrumental to tax evasion. With mounting, unrelenting pressure from the IRS, more and more citizens are compelled to come clean by filing their FBARs.
An FBAR is…
One of the processes required in declaring taxes or in the voluntary disclosure practice is to file Form TD F 90-22, which is a Report of Foreign Bank and Financial Accounts or FBAR. This report is filed annually, and by people who meet specific criteria outlined by the IRS.
You Should File If…
According to the IRS, each United States person who has bank, securities, or other types of foreign financial accounts with which they have financial interest in or other authority over and that aggregately exceed $10,000 in value at any time during the calendar year must report such relationship with the Department of Treasury through an FBAR. The deadline of such report is on or before June 30 of the following year.
An important side note, a United States person is used to mean a citizen or resident of the United States, or a person in and doing business in the United States. In this regard, a foreign subsidiary of a United States person is not required to file an FBAR, although its parent corporation may be required. However, a branch of a foreign entity doing business in the United States must file the report.
When and Where to File…
The FBAR must be filed on or before June 30 of the year following the calendar year that is being reported in the FBAR. Reports can be mailed or hand-carried to the Department of Treasury, or to any local office of the IRS. No extensions are given on the time for filing the report. If an FBAR is filed late, a statement explaining the delinquency must be attached.
Tax violators who have received penalties for failure to file FBARs have prominently been those involved in offshore accounts, as well as those under voluntary disclosure.
Additional legal information on offshore voluntary disclosure is available from the Thorn Law Group, attorneys at law serving the Washington, D.C. area.