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Home / 3 Ways to Voluntarily Disclose your Foreign Bank Accounts

Business owners: find out how you can get up to $26,000 per employee with the Employee Retention Tax Credit.

3 Ways to Voluntarily Disclose your Foreign Bank Accounts

Posted November 18, 2019 Venar Ayar

If you failed to file FBARs for one or more tax years, you have several options for correcting your noncompliance.  The best option for your situation will depend on many factors, and you should consult a tax attorney before choosing an offshore disclosure method.

Executive Summary:

  • Quiet Disclosure
  • Streamlined Procedure
  • Offshore Disclosure Program

Quiet Disclosure

A quiet disclosure involves submitting the delinquent FBARs along with a reasonable cause statement.  You can only use this method if you properly report any income from your foreign accounts on your tax return.

The main benefits of this offshore disclosure method are its simplicity and lack of any required penalty payments.  However, this isn’t a good option if you have unreported income or may have committed willful FBAR violations.

Streamlined Procedures

The Streamlined Procedures are a middle-ground offshore disclosure method.  There are more requirements than a Quiet Disclosure, but the penalties are generally less onerous than those assessed in the new Offshore Disclosure Program.

You’ll need to submit up to three years of amended tax returns and up to six years of delinquent FBARs to use the Streamlined Procedures.  You may also be charged a miscellaneous offshore penalty of 5% of the highest aggregate account balance during the disclosure period.

The Streamlined Procedures may only be used if you certify that your conduct was non-willful.  If the IRS decides your conduct was willful, you may face criminal FBAR penalties.

Offshore Disclosure Program

The Offshore Disclosure Program is the only option that offers immunity from criminal prosecution, making it the  best choice for taxpayers who may have willfully failed to file FBARs.  However, it also involves the highest potential penalty assessments.

These include willful FBAR penalties, which can total up to $100,000 or 50% of the highest aggregate foreign account balance.  You’ll also be required to disclose six years of FBAR noncompliance and failure to report foreign income.

To determine which program is best, you’ll need to carefully analyze all of the facts of your situation and compare the costs and benefits of each disclosure method.  Using the wrong disclosure option could have serious repercussions, including IRS examinations or criminal investigations

Contact an Attorney

To get help with offshore disclosure matters, call Ayar Law at 800.571.7175 to get free, no-obligation tax advice from a qualified tax attorney.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.

More On The Subject

  • What is the Penalty for Not Filing an FBAR Form?
  • When You Should Hire an FBAR Tax Attorney

Filed under: Blog, FBAR, Federal Tax Blog, Foreign Assets, International Tax Blog, Offshore Accounts

Tagged with: FBAR, FBARs, Foreign account, Foreign accounts, foreign bank account, foreign bank accounts, offshore account, Offshore accounts, Offshore Disclosure Program, Quiet Disclosure, Streamlined Offshore Procedures

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