DELINQUENT FBAR SUBMISSION PROCEDURES
What are Delinquent FBAR Submission Procedures?
Delinquent FBAR Submission Procedures or DFSP is an offshore voluntary disclosure option for FBAR (Form FinCEN 114) compliance only. The IRS created DFSP in 2014 in place of the OVDP (IRS Offshore Voluntary Disclosure Program) FAQ#17.
What are the Advantages of Delinquent FBAR Submission Procedures?
As long as the DFSP’s strict eligibility criteria is met, DFSP allows noncompliant US taxpayers to file delinquent FBARs without incurring any FBAR penalties.
Who can Use Delinquent FBAR Submission Procedures?
DFSP is a voluntary disclosure option open to all US taxpayers who can meet the DFSP’s eligibility requirements.
What are the Main Eligibility Requirements of Delinquent FBAR Submission Procedures?
In order to utilize DFSP with respect to delinquent FBARs, the following criteria must be met by a participant:
1. The participant properly reported on his U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs (there is a partial exemption from this requirement where the taxpayer never needed to file US tax returns due to low income);
2. The IRS has not previously contacted the participant regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted; and
3. The participant has not filed the required FBAR(s).
Can IRS Audit the Disclosures Made Through Delinquent FBAR Submission Procedures?
Yes, the IRS can audit DFSP submissions. However, the IRS has stated that a DFSP disclosure will not be automatically subject to audit, but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns.
Who Can Help Me Understand, Prepare and File My Offshore Voluntary Disclosure Using Delinquent FBAR Submission Procedures?
You should contact the experienced international tax firm of Sherayzen Law Office. Our voluntary disclosure team led by an international tax attorney Eugene Sherayzen will help you understand DFSP, evaluate whether you meet the DFSP’s eligibility requirements, prepare and file all of the legal and tax documents required under DFSP, and defend your voluntary disclosure position(s) against the IRS in case of a subsequent audit.
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