Can you cheat the FBAR? What happens if you don't file?
Вставка
- Опубліковано 9 лют 2025
- For immediate help with an FBAR issue visit www.irsmedic.com/offshore
Here are some things you really should know before you decide NOT to file an FBAR.
The FBAR is the Report of Foreign Bank Accounts. FBAR is also known as FinCEN Form 114. A person or entity is required to file an FBAR if they have a financial interest in or signature authority over at least one type of foreign financial account that exceeds an aggregate value of $10,000 at any time during the year. FBAR reporting is not limited to foreign bank accounts. Pensions, life insurance policies, and accounts that earn no money have to be reported.
The FBAR form is a complicated form and is viewed by some as an invasion of privacy. Some clients ask whether they can get away with not filing an FBAR form. I advise those clients that FBAR penalties are steep and willful non-compliance is illegal. Therefore, to avoid legal consequences, I advise filing an FBAR form.
There are six things to be aware of before not filing an FBAR.
If you ever filed an FBAR, you are now in the FinCEN database. Once you are in a database, you can be tracked.
People who don’t comply with the reporting obligation and don’t risk consequences are people who don’t get caught. The IRS only needs to catch you once. IRS tax examiners will ask a person about FBARs. If a person doesn’t answer honestly, he will face civil and criminal penalties. However, answering honestly will have consequences too. Failing to learn about foreign account reporting requirements can be evidence of “willful blindness.” See Internal Revenue Manual, 4.26.16.4.5.3, Paragraph 6.
The DOJ also investigates people for criminal charges related to FBAR non-compliance. Criminal penalties for FBAR violations are frightening, including a fine of $250,000 and 5 years of imprisonment. If the FBAR violation occurs while violating another law the penalties are increased to $500,000 in fines and/or 10 years of imprisonment.
People who have grievances against you are often very willing to offer testimony to the government. If you are not going to file an FBAR form, be confident that the people aware of your reporting obligation won’t offer testimony to the government.
Income and assets can be attached to pay outstanding FBAR penalties. If you have no income or assets that can be attached, you may be able to avoid collection. However, in some jurisdictions, the IRS may be able to seize part of your spouse’s assets to pay your bill.
The statute of limitations for FBAR penalties is 6 years. However, after six years, the IRS may still be able to penalize you for other unfiled foreign reporting forms like Form 5471 or Form 8938. These penalties can be assessed for multiple years, and unlike FBARs, there is no statute of limitations on these types of penalties.
A person’s best option is to file an FBAR correctly and get into a proper offshore disclosure plan. However, there are three things to consider that may take the sting away from this compliance regime:
The FBAR intel is low value to the government. By filing an FBAR, you’re merely bogging down government bureaucracy.
There is no such thing as an FBAR initiated audit. No one looks at an FBAR unless a tax audit is initiated. Don’t think that filing an FBAR is a red flag to get you audited.
If you are going to “come clean” with the IRS do it right or don’t do it at all. Lying to the IRS will make things worse.
www.irsmedic.c...
Parent & Parent LLP
144 South Main Street
Wallingford, CT 06492
(203) 269-6699
info@irsmedic.com
www.irsmedic.com
As an Expat, trying to figure out all the proper forms and things to do I thank you for your help
because there’s no one to really help you when you’re out here thank you again
Can you help me, please. I'm an expat as well. I do not work and have not filed a tax return in years. I have a bank account of less than 1300 per year to comply with the my host country's visa requirement. After just recently finding out about the fbar filing requirement, I'm filing this year's fbar on time. However, would filing past years fbar be asking for an audit. Thanks for any help you can give.
Great job! Thank you so much for doing that as a CPA I read so many bland Tax updates but you make it fun and interesting. I really really appreciate your videos and I will subscribe like and comment them as I watch them!
Thanks for this video! There were a few things I never thought about like their system being hacked into. It feels really invasive that they would ask for your account number.
You are doing an outstanding job.
Excellent presentation. No wasted time, and a written summary provided to boot. I may be contacting you for professional services.
I really love this comment. I love making real content that actually helps people!!!!
I am a US expat living in Australia (dual citizen). The US has a tax treaty with Australia, my filing threshold is over $92k to owe taxes to the US and Australia. FBAR rules, which state you do not have to file if your bank account never exceeds $10k, I have never filed because of this. Any bank account you have your name on as an American, is reported to the IIRS every year by the bank in Australia, as per the tax treaty. Because I have always been a stay at home partner, have never held a job in Australia, and have never earned money of my own, therefore I have never qualified to file tax. I am now disabled, my partner is nearly 70, so we are both on pensions. After rent, groceries, and any small thing we may need, we do not have a lot left over. I have always been relieved that I do not have to go to the expense of these very expensive filings.
Whatever you said is scary. Nobody would like to go out of the country on a job. Ad IRS and govt disclosure act is so risky to even follow the law.
The vast majority of "US persons" living overseas, particularly if they are citizens of those nations should file NOTHING with the IRS or any other US criminal organisation.
Dear IRS - BITE ME!
FBAR enforcement against US expats is fairly impossible. Unless there is something to attach in the US, or some contingent tax evasion or other more serious charge to which would be extraditable (I can't see how a bare FBAR charge would be extraditable -- the crime alleged must be a felony in both countries, failing to file and FBAR is only a crime in the US). That is why there is little civilly or criminally that the US government can do. And I for one think the government should only have laws it can actually enforce. Having unenforceable laws creates contempt for the law.
But a Dutchman born in the Netherlands alerted to his US tax "responsibilities" by his bank(his mother was born in the USA) because of FATCA should tell the IRS to go pound sand and file any communication on the bottom of the parrots cage.
File nothing.
That should be the number one tactic of ALL being pointed at and accused of being a "US person" in the great US FATCA witch hunt.
And as you say, filing so you generate a TAX DEBT gives the IRS MORE powers to take money, so go back to plan one.
The residents and citizens of other nations (in most cases) should file NOTHING with the IRS.
Completely agree. If a person has permanent residency or citizenship in another country the IRS and US government can pretty much forget about it, especially is one never ever goes inside US territory.
@Mike Breen Exactly.
Mike Breen your absolutely RIGHT I dont get why people are even stressing about filing when they live overseas...I would NEVER File anything to them if I ever left the USA for good....I personally know people that left years ago from the USA one was a Naturalized US citizen but had citizenship in another country,got fed up with the US life packed a suitcase bought a 1 way ticket and departed for good..NEVER came back and NEVER renounced,he NEVER filed jack to the IRS and I highly doubt he ever will in this lifetime...there is NO way the US will ever be able to tax all those Americans around the world even with all its resources..FATCA,FBAR and Double taxation is evil,disgraceful and disgusting and needs to be Abolished/Repealed.
In many foreign jurisdictions, it is illegal to report data.
Thank you @IRSMedic for helpful information. Do you need FBAR if you have for US based retirement account set by foreign employer ? Also international group life insurance which do not have cash value - means that your dependents only get money in situation of misfortunate events?
Sorry for not responding earlier. The US based retirement account - probably not. And it's hard to claim the group life is a "bank account" as there is no high account balance. However, I have seen people be over protective and report as there is so much terrible confusion created by the IRS.
One good point was that if you’ve never filed FBAR, probably should never start. But once started, it’s better to do it well. Is it possible to consult?
sure thing - send a email to info@irsmedic
say government web site get hacked or your laptop get hacked? you filled infos on fbar for multiple bank accounts like; account numbers, type of accounts, bank name, bank location and address, bank account amounts. also your social security number and date of birth. can you sue the irs ?
What about new immigrants in the US who just started working and have a bank account that once had more than 10,000 USD in it? But as soon as they moved into the US, their foreign bank account now has nothing as they have moved all their money into their US bank account. Do they still have to file an FBAR for their bank account that has 0 in it? Or should they just close their foreign bank accounts?
Just close it, it's not worth the headache
Thank you. Keep it up.
Thanks for the video...I didnt know about FBAR since last week. I havent filed it for the past 4 years. Can i file file those now and not get penalized?
Don't. Don't back file. IRS will penalize you for sure.
@@lHurtYourFeeIings - what’s the way out ? Can one simply file starting this year and continue thereafter without disclosing anything from the past like a soft or a quiet disclosure. Apparently so many haven’t even heard of this before .
@@gautamkhanna5842 I would completely not report it... the feds doesn't know unless you let them know, or the foerign bank releases all American customer data to US for some reason. Out of all the people that got in trouble, they decided to report it out of the blue, that is how they raise above the radar.
@@lHurtYourFeeIings - thanks . It’s for a friend who moved to a foreign country hence the reporting obligation as how come one survive in a foreign land without a bank account? So her concern was what happens if she starts to report it from this year onwards - would they ask for previous year records or will it just be considered as a fresh start and she’d get into the system
@@gautamkhanna5842 don't.
Should one file an FBAR while 4 years delinquent and unprepared to file with IRS, or should one wait until they are prepared to file with the IRS and then file the FBAR? The IRS owes me and my overseas account barely qualifies. I live overseas and have less than $1k in a US bank account.
Great question. Your FBAR filing requirements and tax requirements are separate so one would think the answer would be to file your FBARs asap and get to your tax returns later. However, the way the IRS disclosure programs works, in order to limited penalties, you typically want to do it one time all together, but that is not a concrete rule. I would suggest giving us a ring --- 888- 477-4258 we can probably give you the answer in 10 minutes.
We were not informed of the FBAR by our CPA at H&R block for the last two years. We used an online software and then came to know about it. How do we proceed? Can we hold H&R block accountable?
I am so sorry you had the experience, Srinath. However, the law is just not on your side here -- you are 100% responsible for everything you sign. Even though you hired someone because you don't feel comfortable. The tax industry set themselves up pretty sweet. They are fairly inoculated from any claims as they can always say "you should have reviewed your return and instructions more closely as the law requires." Yeah they don't lead of with this in their advertising, do they?
This is the sad state of the tax industry - volume providers with limited knowledge can basically screw up as bad as they want with impunity. The goods news is that there is likely a disclosure program that can clean up the mess they made for you. You can give us a ring at 888 477 4258 to find out which one is best for you or email info@irsmedic.com
Would filing an FBAR make sense for a dual-citizen with assets overseas whose bank is operating under another nationality's alias? Asking for a friend of course...
Your friend should waste the Department of Treasury's resources by filing an FBAR.
@@irsmedic I don't think it would be good for my friend to be added to an IRS registry list of FBAR filings. Not to mention the hefty penalties that would come as a result of not filing correctly, and that he would reveal his other alias.
@@roseforeuropa You have a very valind poiint. It is clear the IRS is trying to trip up people "who do that right thing" and then hammer them like they were the worst criminals on earth. If the IRS wants compliance, they can't continue to be absolute creeps.
Are there any foreign governments which report the names of US citizens receiving pensions from that government to the IRS?
Gov't pensions typically are defined benefits, thus have no account value and are typically something that do not go on a 8938 or FBAR. Additionally, in order to be reported via FATCA, there needs to be a Foreign Financial Institution (FFI) to do the reporting. An FFI is a institution that accepts deposits in the ordinary course of business. I don't see how a foreign sovereign making pension payments would be considered an FFI that FATCA would attach to. I do not know of any foreign governments that report the names of US citizens receiving pensions to the IRS. Nor can I see where their obligation to do so is created by any US law.
Thank you
I have foreign IRA account and bank accounts that had more than 10k in 2022. So, I have to file FBAR.
My question is: “Do I have to include my IRA?”
Because in IRS website it says: “you do not need to report foreign accounts that are: held in an individual retirement account (IRA) of which you’re an owner or beneficiary”.
In some videos they say I have to report. I am confused.
The IRA here seems to be a term of art for a US individual retirement account. So a foreign IRA is not the IRS this is likely referring to. IRS regs and instructions say to report. Curiously the law at 31 USC 5314 only mentions monetarty instruments, not even bank accounts. So there is a huge area of uncertainty as the law and what the IRS/FinCEN requires are quite divorced form each other.
@@irsmedic thank you so much for the reply. I filed report but did not include my foreign IRA. I only included bank accounts:( what can I do now?
Can you help me, please. I'm an expat. I do not work and have not filed a tax return in years. I have a bank account of less than 1300 per year to comply with the my host country's visa requirement. After just recently finding out about the fbar filing requirement, I'm filing this year's fbar on time. However, would filing past years fbar be asking for an audit. Thanks for any help you can give.
What about stocks in foreign businesses, bought on NYSE, through an IRA?
great video
i think the fbar should be amended to the same amount as fatca. what is $10k nowadays?
Correct. The IRS is stuck in a 1970 time warp. $10,000 might not be the default amount to commit crimes. And the cartels use cash which isn't reportable on a FBAR.
You said 10,000 for willful violation and then you said non-willful were 10,000. are they both the same?
Sorry for the confusion - up to 50% of account value for willful - $10k per non-willful
Is it 10K USD or any currency that amounts that totals 10K USD?
Yes unecessary risk
It's extremely easy to file.
Thanks Robbie! Will you immediately have to pay taxes after filling it? Or is it just for documentation? Or does it depend?
I am on the L1B Intracompany Visa and I fill my 2019 tax return already so just wanted to know does it required to report FBAR?
Apparently yes if you met the substantial presence test… did you do it?
What happens if I don't file fbar? If I have over 10,000
im not a us citizen but im living in the us on job visa. do i still need to file FinCEN Form 114?
Great question. For tax purposes you are a tax US resident. Yet an FBAR is not a tax form. We advise our clients who are visa holders in the US to file an FBAR if they are required to file taxes.
@@bluehouselive6490 my friend is in visa and before moving he has some securities account. does he needs to fill FBAR.He is here temporarely say for 2 year.
What if I’m on Ssdi?
what am I watching? can I get a simply example of someone who left America and opened a foreign bank account.. etc.. I still have no idea whether or not I need to file an FBAR.
If your account's fair value at any time during the year exceeds $10,000 you have a filing requirement?
@@leny7829 is that total current value or accumulative?