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The FBAR IRS Penalty: What You Need to Know

Wednesday, June 6, 2012

The FBAR deadline is approaching; in fact it is on June 30th of this year. Unfortunately, most people with foreign accounts do not understand how the FBAR filing works, let alone the penalties for not filing the FBAR returns on time. If the FBAR is not received by the 30th, FBAR filers can face severe IRS penalties. IRS officers are not friendly about the FBAR, especially when it is late. Tax payers can face significant penalties, interest and even jail time if they ignore the FBAR deadline.

Income Reporting Worldwide

All U.S. citizens must report their income, regardless if they live in the United States or not. This means that even those working overseas or who have moved to another country will still have to report their income to the IRS officers and pay taxes on that. If they do not, they can face significant IRS penalty fees.

Foreign Bank Accounts

Foreign bank accounts must file their interest earned for the year by the June 30th deadline as well. If not, IRS officers can impose IRS penalty fees that are quite significant. Furthermore, individuals who ignore the FBAR deadline can face other fines and criminal charges for tax evasion if it is proven that they skipped over the deadline on purpose. Anyone who is required to file an FBAR is encouraged to hire a professional to do so for them. Since the FBAR is complicated and IRS officers love to scrutinize it, it is better to have a professional prepare an FBAR return than attempt to do it alone.

FBAR Penalties

When someone fails to file their FBAR, they can face an IRS penalty of up to 50 percent of the funds in the account. That means someone with a $100,000 FBAR account can owe $50,000 to IRS officers just for ignoring the FBAR deadline. If that wasn’t harsh enough, IRS officers can also threaten with jail time. A person who purposely ignores the FBAR can face up to one year in prison as well as a $250,000 fine, which might be a lot more than what they would have owed just paying their FBAR taxes.

If you need assistance with your FBAR case, contact the professionals at My Tax Attorney today. At My Tax Attorney you will receive experienced advice on FBAR penalties and IRS officers. You can have a professional negotiate your FBAR case with IRS officers on your behalf and help you not only avoid harsh penalties, but jail time.

Need more information from the government and IRS about bank levies?  Check out what the IRS says about a bank levy.  Find out the difference between a bank levy and a federal tax lien.  For more information, read about the bank levy procedure from Wikipedia.  You can also find what your local state has to say about a tax levy by using your state and bank levy as a keyword to search Google.  You can also visit the local Beverly Hills Bar Association.