Why Hire an FBAR Tax Attorney
If you have a foreign bank account or similar financial account, you may need to file an FBAR and other information returns. If you have questions about the FBAR, contact a Utah tax attorney at Tax Defense Counsel for a free consultation to discuss your questions regarding foreign financial asset disclosure issues.
The term FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts. This form is not filed with your tax return, but is separately filed directly to the Treasury Department. The form 8938 is similar to the FBAR and must be filed with your tax return. The FBAR form must be filed electronically online through the BSA E-FilingSystem website.
Who must file an FBAR?
If you have an interest in, or signature or other authority over, foreign financial accounts that have an aggregate value exceeding $10,000 at any time during the calendar year, generally you must file an FBAR and may need to file form 8938, Statement of Specified Foreign Financial Assets. An FBAR tax attorney can help with this.
U.S. citizens and resident aliens generally must report any worldwide income, including income from foreign trusts, foreign businesses, foreign bank and investment accounts, and potentially foreign retirement accounts. In most cases, if you have a foreign bank account you may need to complete and attach Schedule B to your tax return.
Exceptions to the Reporting Requirement
There are several filing exceptions for the following United States persons or foreign financial accounts, including but not limited to:
- Certain foreign financial accounts jointly owned by spouses
- Certain individuals with signature authority over, but no financial interest in, a foreign financial account
- Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust)
What is a Foreign Financial Account?
The term foreign financial account includes, but is not limited to, the following types of accounts:
- Bank accounts such as savings accounts, checking accounts, and time deposits;
- Securities accounts such as brokerage accounts and securities derivatives or other financial instruments accounts;
- Commodity futures or options accounts;
- Insurance policies with a cash value (such as a whole life insurance policy);
- Mutual funds or similar pooled funds; and
- Any other accounts maintained in a foreign financial institution or with a person performing the services of a financial institution.
The definition of foreign financial account is very broad and often requires a case by case analysis to determine if a particular account must be included on the FBAR.
What Should I do if I haven’t filed the required FBARs?
If you haven’t filed an FBAR, you have options to become compliant and avoid steep penalties. The OVDP or Streamlined Offshore Disclosure may be right for you. If the IRS initiates an examination of your return, the IRS could assess significant penalties for failure to file the FBAR. In addition, failing to file the FBAR and related information returns can stop the statute of limitations for audit and assessment. It is best to address the issue head on and work out a resolution before the IRS comes knocking on your door.
Contact a Utah FBAR Tax Attorney Today
Contact a Utah FBAR tax attorney at Tax Defense Counsel today for a free consultation. A Utah tax attorney can explain your obligations and options pertaining to FBAR compliance.Free Consultation