FBAR Filing: Voluntary Disclosure Information FBAR Filing On Your Overseas Accounts| Gordon Law LTD call at (847) 580-1279 The IRS has set up a voluntary disclosure practice to help those with a foreign account come into the compliance that the IRS requires in the United States. Many of the people who join this program do so after having a foreign account that the IRS did not know about. While the IRS will assess some penalties and fees on the accounts, they are much lower than what the IRS will assess if you keep the account a secret for longer. This fact makes the voluntary disclosure process ideal for a lot of people will foreign bank accounts. This article will look at some of the facts with the voluntary disclosure.
What is the point of voluntary disclosure? The IRS started this process in the hopes of allowing those with foreign accounts that had not been disclosed to become compliant with the tax laws of the United States. Also, the IRS will be able to use the information they gather during the process to understand how foreign countries promote these accounts to taxpayers in the United States. In some cases, these foreign accounts were promoted as a method of evading taxes to the taxpayer. Why should I consider doing voluntary disclosure? When you make a voluntary disclosure, you are becoming compliant with the tax laws in the U.S. This can help you to avoid big civil penalties and can take away the risk of being criminally prosecuted. If you choose to not go through the voluntary disclosure, you are eventually caught by the IRS, and large fees are imposed as well as having to face jail time for evading taxes. You will still owe fees on the overseas money, but it is a much better option compared to letting the IRS find you. You need to go through this practice promptly and complete all of the provisions truthfully. If the taxpayer follows these steps, the IRS usually does not recommend any prosecution Is it possible to use voluntary disclosure if I am already being examined? No. To use voluntary disclosure, you must be in the process before the IRS finds out about your foreign accounts. Once the IRS finds out about your foreign accounts, you forfeit the right to using this process. The IRS will charge substantial fees and depending on the length of deception and other factors, will criminally prosecute you. I have reported all of my income properly over the years, but just found out that I needed to file FBARs for other years and failed to do so. Do I need to use the voluntary disclosure practice to do this?