FBAR (FinCEN Form 114 formerly Form TD F 90-22.1) penalties can be absolutely draconian. However, with a help of an experienced international tax attorney, they do not have to be so brutal.
Unfortunately, the IRS, accountants and even many lawyers present an overly simplistic view of the FBAR penalty structure. They start out with the potential criminal penalties and absolutely outrageous willful penalties and they usually end there by arguing that a non-compliant taxpayer should enter into the OVDP program.
What many tax professionals do not discuss is the immense complexity of the FBAR penalty structure that offers various chances to reduce and, sometimes, even eliminate your FBAR penalties through establishing non-willfulness and various mitigation guidelines.
This is a discussion that a tax professional must have with his client; otherwise, the client will not get the full picture of his case and cannot make an informed decision with respect to his voluntary disclosure options.
Notice that the potential for reduction of the FBAR penalties that exists under the current law is not the same as chimerical schemes that abound the internet. On the contrary, this is a serious discussion of what your potential FBAR penalties may be and what is the likelihood of success.
In some case, mitigation of penalties is a real possibility while, in others, entering the OVDP program may constitute a better choice. The important argument at the core of this essay is that the taxpayer should know about all of the options before the decision to the OVDP is made – i.e. the taxpayer has a chance to make a fully-informed decision, not a fear-driven one.
Contact Sherayzen Law Office to Discuss the FBAR Penalty Structure and Possibilities for Reducing Your FBAR Penalties
If you have undisclosed foreign assets, contact Sherayzen Law Office for legal help with your voluntary disclosure. Our experienced tax law firm will thoroughly review your case, estimate your FBAR penalties, analyze the potential for reduction of these penalties vis-a-vis entrance into the OVDP and present to you the available voluntary disclosure options so that you can make an informed decision.