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THE IRS WANTS TO HEAR ABOUT THAT ACCOUNT IN THE CAYMANS
February 28, 2007
The IRS issued a Fact Sheet yesterday covering the requirements for reporting foreighn financial accounts:
Who is required to report their foreign accounts to the government, and how do they do so? The Bank Secrecy Act requires U.S. persons who own a foreign bank account, brokerage account, mutual fund, unit trust, or other financial account to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Authority (FBAR), if:
1. The person has financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
These forms are due by June 30. Failure to file can lead to unpleasant consequences:
For an FBAR violation occurring after Oct. 22, 2004, the maximum civil penalty for a willful violation of the FBAR reporting and recordkeeping requirements is the greater of $100,000 or 50% of the balance in the account at the time of the violation. Non-willful violations can result in a penalty as high as $10,000 for each violation. Criminal violations of the FBAR rules can result in a fine and/or five years in prison.
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Comments
If you don't file your FBAR you're FUBAR.
Posted by: Chad | February 28, 2007 9:52 AM
Heh!
Posted by: Joe Kristan | February 28, 2007 1:21 PM
But what is the penalty for filing the FBAR late? You get the letter proposing a penalty and then file the FBAR late...I couldn't find a penalty anywhere. Check the Gov't own enforcement manual regarding FBAR's. The Gov't even admits this strategy.
Posted by: Dave | March 12, 2007 11:23 AM
Per the fact sheet:
"For an FBAR violation occurring after Oct. 22, 2004, the maximum civil penalty for a willful violation of the FBAR reporting and recordkeeping requirements is the greater of $100,000 or 50% of the balance in the account at the time of the violation. Non-willful violations can result in a penalty as high as $10,000 for each violation. Criminal violations of the FBAR rules can result in a fine and/or five years in prison."
That's significant enough for me to not want to fight with them over wheter the violation is "willful".
Posted by: Joe Kristan | March 12, 2007 5:31 PM