IRS regulations require a Report of Foreign Bank and Financial Accounts (FBAR) anytime a U.S. tax payer has at least one foreign financial account with an aggregate value exceeding over $10.000 in a calendar year.
Reasons to file FBAR
Failure to file on time or erroneously can result in heavy fines and even possible criminal charges. As the global community becomes more integrated, the IRS has been making increased efforts to track down foreign financial accounts controlled by U.S. taxpayers.
In one example: Swiss financial institute UBS paid $780 million in fines along with the release of 4,500 account holder names to the IRS in 2009.
However, it is not the primary intent of the IRS to penalize taxpayers for holding a foreign bank account.
In an effort to help taxpayers comply with current tax regulations, the IRS developed foreign bank account amnesty programs to resolve tax liabilities while also minimizing chances of criminal prosecution.
The IRS has implemented the 2012 Offshore Voluntary Disclosure Initiative (OVDI) specifically for unreported foreign financial accounts and for making amendments on past filings.
The steps to compliance
Before the implementation of the 2012 OVDI, the IRS permitted over 15,000 tax payers to successfully participate in the 2009 Offshore Voluntary Disclosure Program.
PIASCIK international tax professionals have navigated over 35 clients through foreign bank account amnesty programs with over 90 expatriates represented in 49 countries and on every continent – with the exception of Antarctica. PIASCIK international tax professionals know every step to OVDI so you can meet current IRS rules while still saving you money with flat fees and no hidden charges. There are three basic stages to enter OVDI – pre-clearance, request for initial data, and complete voluntary disclosure package.
Pre-clearance
The first stage of the OVDI program is faxing a power of attorney to the IRS Criminal Investigation Lead Development Center for requesting permission to enter the program. This does not guarantee acceptance, but it can be a clear indicator of existing conditions with your FBAR filings.
Request for initial data
The second stage is the submission of an Offshore Voluntary Disclosure Letter within 30 days. It details the time and amount of foreign financial accounts you have maintained, reasons for holding the account, and the tax liabilities associated with the accounts. The IRS then reviews and determines if this preliminary letter is sufficient for continuing forward towards foreign bank account amnesty.
Complete voluntary disclosure package
The final stage of the OVDI program is the complete voluntary disclosure package which involves a detailed update of all applicable FBAR filings and taxes of all of your foreign financial accounts. During this stage the IRS determines your acceptance into the OVDI program.
Expert advice when you need it
PIASCIK has been recognized as experts in OVDI programs, IC-DISC matters, expatriate taxation, and other international tax matters. With over 75 years of combined international tax experience, no other tax firm has our dedication, resources, and firsthand knowledge helping expatriates, resident aliens and other taxpayers meet their tax obligations. Our expertise is accessible 24 hours a day and 7 days a week. PIASCIK even offers the initial consultation absolutely FREE with no obligations from you. You have nothing to lose and valuable information to gain. Contact PIASCIK today and experience how foreign bank account reporting amnesty may help you.
