hi INDiA Copyright 2020
HI INDIA NEWS DESK
CHICAGO, IL -Indian-Americans face a little known, but serious, risk to their financial security: failing to file the FBAR, an annual disclosure form regarding foreign financial accounts.
Under the Bank Secrecy Act, any U.S. person with foreign financial accounts must file a Report of Foreign Bank and Financial Accounts (FBAR) if the total of those accounts valued $10,000 or more at any time during the calendar year.
“Every day, I hear from clients who were unaware of their reporting requirements,” said Andrew Gordon, a tax attorney and CPA who resolves delinquent FBAR issues. “Unfortunately, the IRS doesn’t consider ignorance a valid excuse.”
The penalties for non-filing can be severe. For accidental violations, the typical penalty is $10,000 for each year of non-filing. For willful violations, civil penalties can skyrocket up to $100,000 or 50% of the highest account value, whichever is higher. This penalty can be assessed for each year of violations.
“Once [people] learn about the FBAR, they are terrified they’ll be found out and face these harsh penalties,” Gordon said.
The good news is that if you are not on the IRS’s radar already, there is a chance to correct past FBAR mistakes. Many individuals qualify for streamlined disclosure, which greatly reduces penalties. The Voluntary Disclosure Program is also an option for more sensitive cases.
The FBAR (FinCEN Form 114) is due on April 15 in addition to the standard tax return.
If you are concerned about FBAR filing and want to explore options to correct past mistakes, contact Gordon Law Group at (847) 581-6951 or visit gordonlawltd.com.