New Much-Needed Guidance for Non-Willful FBAR violations

- By : P. Patel

Last week, the Internal Revenue Service released interim guidance (SBSE-04-0515-0025) on foreign bank account report (FBAR) (also known as FinCen 114) penalties to improve the administration of the FBAR compliance program. The guidance contains amendments to the Internal Revenue Manual (IRM), effective immediately, and applies to all open cases in which the FBAR penalties are at

Another Taxpayer Found Guilty of Failure to File FBARs and Report Foreign Income

- By : P. Patel

Raju Mukhi of St. Louis MO was indicted last year for his alleged failure to file a report to the IRS on his foreign financial accounts and for filing false tax returns. United States citizens are required to report income from foreign countries, such as bank account, securities and any other financial accounts on their

Helpful Non-willful FBAR penalty case decided by court

- By : P. Patel

For the first time, in the case of James Moore, Plaintiff v. United States of America, Defendant (James Moore v. U.S. Case 2:13-cv-02063-RAJ filed 4/1/15), we finally get a look at some non-willful FBAR penalty litigation. The US district court has essentially dismissed a taxpayer’s challenges to his penalty for failing to file FBARs (Report

FBAR Reporting Season is here

- By : P. Patel

All taxpayers are reminded about FBAR reporting this year, as the process has changed. If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account which exceeds certain thresholds, the Bank Secrecy Act may require

Argue for No Penalty and a Warning Letter for FBAR Violations

- By : P. Patel

The IRS may send a warning letter in lieu of asserting penalties for failure to file a Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts,” if it would be sufficient to bring the individual into compliance, an IRS official recently said. Jason Kuratnick, IRS associate area counsel (Philadelphia), Small Business/Self-Employed Division, explained

Comparison of Form 8938 and FBAR Requirements

- By : P. Patel

The new Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts). Individuals must file each form for which they meet the relevant reporting threshold.      Form 8938, Statement of Specified Foreign Financial Assets FinCEN Form 114, Report of

IRS Announces New Rules for FBAR Penalties

- By : P. Patel

There are two types of penalties applicable to FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts) (FBARs):  (1) Non-Willful and (2) Willful.  The penalties are theoretically assessed per account and not per FBAR; however, in practice, our firm has seen application on a per FBAR filing.  Additionally, the penalties are assessed for each

New FinCEN Form 114 (FBAR) Filing Rules Announced

- By : P. Patel

Responding to the needs of many filers who submit Reports of Foreign Bank and Financial Accounts (FBARs) jointly with spouses, or wish to submit them via third-party preparers, the Financial Crimes Enforcement Network (FinCEN) today introduced FinCEN Form 114(a), Record of Authorization to Electronically File FBARs. A copy of this form would be maintained by

FBAR Deadline is June 28, 2013

- By : P. Patel

This month we remind taxpayers of the upcoming June 30, 2013 deadline for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to report financial interests in, or signature authority over, foreign financial accounts. There is no extension to provide any additional time to report financial interests in foreign financial accounts.

How to Defend Against FBAR Penalties

- By : P. Patel

Following the IRS’ successful 2009 and 2011 offshore voluntary compliance initiatives, tax professionals should expect an increase in IRS examination activity of taxpayers who did not enter into these compliance initiatives. Approximately 30,000 taxpayers entered into the initiatives. There are hundreds of thousands that the IRS suspects are not in compliance. The IRS has a