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The Foreign Bank Account Reporting (FBAR) requirements were enacted in an effort to combat tax evasion and spur compliance with U.S. tax laws. After years of low compliance, Congress amended the FBAR legislation in 2004 with more stringent rules, enhanced penalties and stronger enforcement powers.
These regulations require taxpayers with a financial interest in, or signature authority over, a foreign financial account to file an FBAR (formerly IRS Form TD F 90-22.1, now filed electronically) if the value of all foreign accounts exceeded $10,000 at any time during the calendar year to be reported. Many individuals with foreign financial accounts unwittingly violate FBAR reporting requirements, often because they are not aware of their responsibilities. Complicating the picture, the FBAR is due by June 30 of every year, while the actual tax return is due on April 15.
Failure to comply with FBAR requirements can result in large civil tax penalties and potential criminal penalties.
The federal government has created several Offshore Voluntary Disclosure Programs (OVDP) and streamlined filing procedures allowing foreign account and asset holders to bring themselves into compliance with the FBAR reporting requirements – as well as the requirements under the newer Foreign Account Tax Compliance Act (FATCA) – and avoid serious penalties.
Philadelphia, Pennsylvania tax attorney Joseph R. Viola has extensive experience representing taxpayers seeking to participate in the OVDP and requiring other advice regarding FBAR, FATCA and other legal issues relating to foreign bank accounts and assets. We welcome you to contact us for an assessment of your situation.