FBAR Penalties are Critical if Amnesty Program not elected
The Internal Revenue Service launched the Offshore Voluntary Disclosure Initiative that allows you to come clean and report all of your offshore accounts since 2003 if you have not done the correct FBAR Amnesty Program so far. The initial step in the process is filing a finished TD F 90-22 and including copies of your previous tax returns for those years. It also demands that as soon as this is completed you must sign papers that permit the IRS to extend the tax assessing time period, pay 20% tax penalty on all underpayments for all years, pay failure to file in addition to failure to pay penalties. FBAR Amnesty add up to as much as 25% of the collective balance of all your offshore accounts. Then, and only then, if you have paid all the penalties and taxes you may file a form 906 to finalize the case. If you are currently experiencing a civil or criminal case at this time you are not eligible for this program.
The FBAR forms have to be filed every year once you have opened and still hold foreign accounts. The penalties are ruthless and can even end in prison time if you do not file your reports correctly. The most ordinary way to get in trouble with FBAR Amnesty is to start filing forms going forward without mentioning older accounts, filing late FBAR Forms in different envelopes in an attempt to avoid attention, or filing more than 8 different forms with letters explaining that you did not know you were required to file the FBAR Forms.
Even if you do not owe taxes from a previous year, you should still complete the appropriateIRS FBAR Amnesty still pertain for not submitting the correct forms. You should never try to evade filing these forms unless you are ready to risk serious penalties that may possibly include prison. The system for FBAR Amnesty Programs can be confusing and difficult to get through, but it is important to have competent representation when you begin this process so as to eliminate any doubt over whether or not you have understood the current laws. Due to the attack on foreign accounts it is unlikely that you will be able to stay unnoticed if you have never done an FBAR Amnesty Program in the past. With the OVDI, it is better that you report all that you have at this time in an effort to evade future tax issues.