Has the IRS Contacted You About Foreign Accounts? Understanding FBAR Penalties and Their Impacts

Online, March 20, 2012 (Newswire.com) - If you have been contacted by the IRS about failure to file a FBAR or if you owe the IRS for nonwillful filing or more severe, costly penalties for failure to file, IRS Tax Relief Now, Inc. is offering free FBAR consultations to help taxpayers mitigate their exposure to penalties.

One of the most important things to note about Foreign Bank Account Reporting is that many taxpayers with foreign accounts or signature authority on foreign accounts do not completely understand the regulations they are required to follow. "It's an unfortunate reality than many taxpayers hit with FBAR penalties are completely unaware of the requirement to file" said Andrew Allard, Enrolled Agent and Director of Tax Negotiation for IRS Tax Relief Now, Inc. "Those that fail to file nonwillfully may be hit with substantial penalties and the penalties for willful non-filing and avoidance can be extremely severe. Moreover, it's very important to act and inform the IRS of foreign accounts in excess of $10,000.00 because once you are under examination, your ability to "voluntarily disclose" and avoid harsh penalties will be eliminated."

Who is required to file an FBAR? US Taxpayers with foreign accounts in excess of $10,000.00 must file an FBAR. As well, US taxpayers with signature authority on a foreign account valued at $10,000.00 must file as well.

How do you file the FBAR? Taxpayers may disclose foreign account holdings in a number of ways. First, you can disclose your foreign account holdings when you file taxes. According to the FBAR Penalty page on the IRS website:

"Filers report their foreign accounts by (1) completing boxes 7a and 7b on Form 1040 Schedule B, box 3 on the Form 1041 "Other Information" section, box 10 on Form 1065 Schedule B, or boxes 6a and 6b on Form 1120 Schedule N and (2) completing Form TD F 90-22.1" Click HERE to read the full FBAR filing instructions and obtain the requisite forms.

If you have been contacted by the IRS about FBAR penalty violations or if you would like a free consultation with a knowledgeable professional to help you mitigate FBAR penalties, you may request a free consultation with IRS Tax Relief Now, Inc. at any time on our FBAR Penalty page.