Report of Foreign Bank and Financial Accounts FINCEN Form 114

Do I need an Accountant or Attorney for Form 8938 Offshore Assets Disclosure?

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A lot of taxpayers are still confused about whether they need an attorney or an accountant to file delinquent Forms 8938. As I explain below, Form 8938 is an essentially legal disclosure form and its voluntary disclosure should be handled by an experienced international tax attorney.

Form 8938 Requires Legal Disclosure

It is important to understand that Form 8938, more than any other form except the FBAR now Form 114 (formerly TD F 90-22.1), requires a legal disclosure of specified foreign assets. The form does not involve any accounting calculations of tax liability or even knowledge of US GAAP (something that other information tax returns, like Forms 5471 or 8865, may require). The taxpayer simply needs to disclose his ownership of specified offshore assets according to the instructions of Form 8938.

Failure to File Form 8938 Is a Legal Issue

Since Form 8938 is a legal disclosure form, the failure to file the form and the penalties associated with the form constitute a legal problem that should be handled by an international tax attorney, not an accountant.

This is even more the case because the strategy with respect to handling Form 8938 and the explanation of the reasonable cause require advocacy – a critical skill which is a part of an attorney’s basic training, which accountants are not trained in.

Clients need an advocate to deliver their position to the IRS in a clear manner. Clients need an advocate to be able to interpret the law, not simply assume that what the IRS agent is saying is the only true version of the law. Finally, clients need an advocate to defend their interests with skill and persuasion.

Tax attorneys are advocates, in addition to performing calculations. Despite the seeming confusion over the role of the two professions, an attorney’s entire approach is likely to be radically different from that of an accountant simply because attorneys are trained to think and act in a completely different manner.

Contact Sherayzen Law Office for Legal Help with Your Voluntary Disclosure of Specified Foreign Assets

If you have undisclosed offshore assets that should have been disclosed on Form 8938, contact Sherayzen Law Office. Our experienced international tax firm will thoroughly analyze your case, estimate your potential Form 8938 penalties, identify all non-compliance issues, and develop a comprehensive approach to your offshore voluntary disclosure.

FBAR Disclosure: Fighting the Small Accounts Myth

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A Minneapolis attorney recently said to me that he has a client who has not filed the FBARs but that client has a number of small accounts and no large accounts; the attorney wanted my opinion on whether it is worth it for smaller clients to go through the trouble of disclosing the accounts to the IRS. My answer was an emphatic YES!

This is exactly the type of myths that I have to battle when I get calls from all around the world from potential clients with smaller accounts. The general impression among these clients is that the IRS will only enforce the FBAR requirement against the “big fish” and there is no need to trouble themselves with voluntary disclosure of the FBARs.

Unfortunately, this impression cannot be further from the truth. Tax experts around the country agree that the IRS enforcement of the FBAR requirements has risen to an unprecedented level. The risk of detection, especially once FATCA is fully implemented by the end of the year 2013, has been steadily growing since the 2008 UBS case, fed further by the information disclosed by the participants in the IRS voluntary disclosure programs. As a result, the number of the FBAR prosecutions by the IRS has also risen dramatically.

Given the draconian penalties associated with willful failure to file the FBAR and the high risk of detection, it is imperative for the small accountholders to go through the voluntary disclosure process (either through the 2012 OVDP or its alternatives) before the IRS finds them.

Moreover, for the smaller taxpayers who just found out about the FBAR and who may have a reasonable cause argument, there is an incentive to disclose the FBARs as soon as possible because, with an able attorney experienced in FBAR disclosures, they may be able to dramatically reduce and even eliminate the FBAR penalties.

However, the original non-willfulness can easily grow into willfulness where the taxpayers learn about the existence of the FBAR requirement, consciously disregard it and fail to file the FBARs. At that point, the original innocence of non-willful ignorance is gone, and the taxpayer is likely to face the imposition of much heavier penalties by the IRS.

It is worth noting, moreover, that in these willful cases, the imperative to do voluntary disclosure should be even higher precisely because the IRS is likely to impose unbearably high penalties otherwise. This is why the IRS created the 2012 Offshore Voluntary Disclosure Program so that these taxpayers can bring themselves back into tax compliance without fear of criminal prosecution.

It should be clear to all non-compliant US taxpayers – voluntary disclosure of offshore accounts is almost always better than the IRS finding your non-disclosed account. In my practice, the practice of FBAR voluntary disclosure has always been more beneficial to my clients whether they were located in Minneapolis, New York, San Francisco, Tampa, Canada, Australia, Mexico, Germany, Switzerland or any other country.

Contact Sherayzen Law Office for Help with Delinquent FBARs

If you have undisclosed foreign accounts and have not filed your FBARs, contact Sherayzen Law Office for help. Our experienced FBAR tax firm will thoroughly analyze your case, assess your current FBAR liability, examine your voluntary disclosure options and implement a comprehensive voluntary disclosure strategy striving to achieve the best result for you.

2012 FBAR is Due on June 30, 2013

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One of the most important tax compliance forms for businesses and individuals is the Report of Foreign Bank and Financial Accounts (the “FBAR”), FinCEN Form 114 Formerly TD F 90-22.1. Pursuant to the Bank Secrecy Act, 31 U.S.C. §5311 et seq., the Department of Treasury (the “DOT”) has established certain recordkeeping and filing requirements for United States persons with financial interests in or signature authority (and other comparable authority) over financial accounts maintained with financial institutions in foreign countries. If the aggregate balances of such foreign accounts exceed $10,000 at any time during the relevant year, the FBAR must be filed with the DOT.

The FBAR must be filed by June 30 of each relevant year, including this year (2013). Thus, the 2012 FBAR must be received by the DOT by June 30, 2013. This rule is contrary to your regular tax returns where the mailing date determines whether the filing is timely. There are no extensions available – the FBAR must be received by June 30 or it will be considered delinquent.

If the FBAR becomes delinquent, it may be subject to severe penalties.

Contact Sherayzen Law Office for FBAR Assistance

If you have any questions or concerns regarding whether you need to file the FBAR or how to prepare the form, please contact Sherayzen Law Office directly. If you have not previous filed the FBARs and you were required to do so, you may be subject to severe penalties and you may need to do some form of a voluntary disclosure. In such case, you need to contact our experienced international tax attorneys to schedule a consultation as soon as possible. Attorney Eugene Sherayzen will assess your situation, determine your potential FBAR liability, explain the available options, prepare all of the required tax forms and the necessary legal documentation, guide you through this complex process of voluntary disclosure, and vigorously represent your interests during your negotiations with the IRS.

FBAR Attorney

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If you are looking for an attorney to help you with your FBAR issues, contact Sherayzen Law Office.

Sherayzen Law Office is an international tax and business law firm that specializes in FBAR compliance among other international tax issues. Our office is located in Minneapolis, but we have clients throughout the United States and overseas.

Helping U.S. taxpayers who have FBAR issues is one of our most important specializations. FinCEN Form 114 formerly Form TD F 90-22.1, the Report of Foreign Bank and Financial Accounts (commonly known as the “FBAR”), is not the most complex form in the Internal Revenue Code, but it is definitely one of the most severe forms when it comes to penalties. A lot of U.S. taxpayers either do not know about this form, do not realize how important it is, or they already realized that they should have filed the FBAR earlier and do not know how to get out of the vicious cycle of non-compliance.

Our international tax firm is highly experienced in these delinquent FBAR matters, including the voluntary disclosure process. We will analyze your case thoroughly, determine your FBAR liability and identify your voluntary disclosure options. Once you make your choice with respect to your voluntary disclosure option, we will create and implement a customized case strategy, including preparation of all of the necessary tax forms and legal briefs.

Clients of Sherayzen Law Office enjoy the personal attention of Mr. Eugene Sherayzen, the firm’s owner, who will be working with you throughout the process in order to make sure that your case proceeds efficiently. He is easily accessible by phone and email throughout the case.

We believe that each case is unique, especially in such complex matters as FBAR voluntary disclosure. Our international tax law firm will be looking for the unique features in your particular fact pattern to determine the most expeditious and favorable manner to proceed with your case.

One the biggest problems facing U.S. taxpayers in finding the right FBAR representation at this point is the tendency among some accounting firms and even law firms to disregard the special circumstances of a case and automatically channel their clients into the 2012 OVDP (Offshore Voluntary Disclosure Program) at the highest penalty rates with the idea that they will figure out later what the strategy of the case will be and whether the taxpayer needs to opt-out of the program.

We believe that this is an incorrect approach which completely disregards the individual circumstances of each taxpayer and may subject them to an unnecessarily high penalties and additional legal and accounting fees. Each case should be thoroughly analyzed at the beginning of the process before the taxpayers enters the 2012 OVDP, not in the middle or even at the end of the voluntary disclosure.

Contact Sherayzen Law Office for Help with FBARs

If you have any undisclosed foreign financial accounts, contact Sherayzen Law Office as soon as possible for an individual, comprehensive, creative and ethical approach to your voluntary disclosure process.

FBAR Lawyers Minneapolis

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Sherayzen Law Office is a premier international law firm that specializes in FBAR compliance among other international tax issues. The firm is headquartered in Minneapolis, but it serves clients throughout the United States and overseas.

FinCEN Form 114 formerly Form TD F 90-22.1, the Report of Foreign Bank and Financial Accounts (commonly known as the “FBAR”), is not the most complex form in the Internal Revenue Code, but it is definitely one of the most severe forms when it comes to penalties. A lot of U.S. taxpayers either do not know about this form, do not realize how important it is, or they already realized that they should have filed the FBAR earlier and do not know how to get out of the vicious cycle of non-compliance.

Helping these taxpayers is our specialty. Our international tax firm is highly specialized and experienced in the FBAR matters, including FBAR voluntary disclosure. We will analyze your case thoroughly, determine what your FBAR liability is (because this is not a straightforward matter and there are a lot of factors that influence your potential FBAR penalties) and identify your voluntary disclosure options.

Once you have made your choice with respect to your voluntary disclosure, we will proceed with implementing your customized case strategy. Attorney Eugene Sherayzen will personally be working with you throughout the case; we will prepare all of the required documentation (including any tax forms and the necessary legal briefs), submit all documentation to the IRS and rigorously represent your interests before the IRS throughout the voluntary disclosure process.

Contact Sherayzen Law Office for Help with FBARs

If you have any undisclosed foreign financial accounts, contact Sherayzen Law Office as soon as possible. The earlier you contact us, the sooner we can schedule a consultation to review your case. It is highly important that you contact Sherayzen Law Office before the IRS begins its investigation of your undisclosed accounts, because such investigations may preclude the availability of some of the voluntary disclosure options.