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2018 FBAR Currency Conversion Rates | FBAR Tax Lawyer & Attorney

2018 FBAR and 2018 Form 8938 instructions both require that 2018 FBAR Currency Conversion Rates be used to report the required highest balances of foreign financial assets on these forms. In the case of 2018 Form 8938, the 2018 FBAR Currency Conversion Rates is the default choice, not an exclusive one.

The U.S. Department of Treasury  already published the 2018 FBAR Currency Conversion Rates online (they are called “Treasury’s Financial Management Service rates” or the “FMS rates”).

Since the 2018 FBAR Currency Conversion Rates are very important to US taxpayers, international tax lawyers and international tax accountants, Sherayzen Law Office provides the table below listing the official 2018 FBAR Currency Conversion Rates (note that the readers still need to refer to the official website for any updates).

 

Country – Currency

Foreign Currency to $1.00

AFGHANISTAN – AFGHANI

74.576

ALBANIA – LEK

107.05

ALGERIA – DINAR

117.898

ANGOLA – KWANZA

310.0000

ANTIGUA – BARBUDA – E. CARIBBEAN DOLLAR

2.7000

ARGENTINA – PESO

37.642

ARMENIA – DRAM

485.0000

AUSTRALIA – DOLLAR

1.4160

AUSTRIA – EURO

0.8720

AZERBAIJAN – NEW MANAT

1.7000

BAHAMAS – DOLLAR

1.0000

BAHRAIN – DINAR

0.3770

BANGLADESH – TAKA

84.0000

BARBADOS – DOLLAR

2.0200

BELARUS – NEW RUBLE

2.1600

BELGIUM – EURO

0.8720

BELIZE – DOLLAR

2.0000

BENIN – CFA FRANC

568.6500

BERMUDA – DOLLAR

1.0000

BOLIVIA – BOLIVIANO

6.8500

BOSNIA – MARKA

1.7060

BOTSWANA – PULA

10.6610

BRAZIL – REAL

3.8800

BRUNEI – DOLLAR

1.3610

BULGARIA – LEV

1.7070

BURKINA FASO – CFA FRANC

568.6500

BURUNDI – FRANC

1790.0000

CAMBODIA (KHMER) – RIEL

4103.0000

CAMEROON – CFA FRANC

603.8700

CANADA – DOLLAR

1.3620

CAPE VERDE – ESCUDO

94.8800

CAYMAN ISLANDS – DOLLAR

0.8200

CENTRAL AFRICAN REPUBLIC – CFA FRANC

603.8700

CHAD – CFA FRANC

603.8700

CHILE – PESO

693.0800

CHINA – RENMINBI

6.8760

COLOMBIA – PESO

3245.8000

COMOROS – FRANC

428.1400

CONGO, DEM. REP – CONGOLESE FRANC

1630.0000

COSTA RICA – COLON

603.5000

COTE D’IVOIRE – CFA FRANC

568.6500

CROATIA – KUNA

6.3100

CUBA – PESO

1.0000

CYPRUS – EURO

0.8720

CZECH REPUBLIC – KORUNA

21.9410

DENMARK – KRONE

6.5170

DJIBOUTI – FRANC

177.0000

DOMINICAN REPUBLIC – PESO

49.9400

ECUADOR – DOLARES

1.0000

EGYPT – POUND

17.8900

EL SALVADOR – DOLARES

1.0000

EQUATORIAL GUINEA – CFA FRANC

603.8700

ERITREA – NAKFA

15.0000

ESTONIA – EURO

0.8720

ETHIOPIA – BIRR

28.0400

EURO ZONE – EURO

0.8720

FIJI – DOLLAR

2.1080

FINLAND – EURO

0.8720

FRANCE – EURO

0.8720

GABON – CFA FRANC

603.8700

GAMBIA – DALASI

50.0000

GEORGIA – LARI

2.6700

GERMANY – EURO

0.8720

GHANA – CEDI

4.8250

GREECE – EURO

0.8720

GRENADA – EAST CARIBBEAN DOLLAR

2.7000

GUATEMALA – QUENTZAL

7.7150

GUINEA – FRANC

9076.0000

GUINEA BISSAU – CFA FRANC

568.6500

GUYANA – DOLLAR

215.0000

HAITI – GOURDE

77.1180

HONDURAS – LEMPIRA

25.0000

HONG KONG – DOLLAR

7.8320

HUNGARY – FORINT

280.1700

ICELAND – KRONA

116.1100

INDIA – RUPEE

69.8000

INDONESIA – RUPIAH

14440.0000

IRAN – RIAL

42000.0000

IRAQ – DINAR

1138.0000

IRELAND – EURO

0.8720

ISRAEL – SHEKEL

3.7490

ITALY – EURO

0.8720

JAMAICA – DOLLAR

126.0000

JAPAN – YEN

109.8500

JERUSALEM – SHEKEL

3.7490

JORDAN – DINAR

0.7080

KAZAKHSTAN – TENGE

375.1500

KENYA – SHILLING

101.8000

KOREA – WON

1114.4900

KOSOVO – EURO

0.8720

KUWAIT – DINAR

0.3030

KYRGYZSTAN – SOM

69.8000

LAOS – KIP

8535.0000

LATVIA – EURO

0.8720

LEBANON – POUND

1500.0000

LESOTHO – SOUTH AFRICAN RAND

14.3500

LIBERIA – DOLLAR

156.7100

LIBYA – DINAR

1.3860

LITHUANIA – EURO

0.8720

LUXEMBOURG – EURO

0.8720

MACAO – MOP

no listing

MACEDONIA FYROM – DENAR

53.5000

MADAGASCAR – ARIARY

3470.2000

MALAWI – KWACHA

733.0000

MALAYSIA – RINGGIT

4.1300

MALI – CFA FRANC

568.6500

MALTA – EURO

0.8720

MARSHALL ISLANDS – DOLLAR

1.0000

MARTINIQUE – EURO

0.8720

MAURITANIA – OUGUIYA

36.0000

MAURITIUS – RUPEE

34.1500

MEXICO – PESO

19.6540

MICRONESIA – DOLLAR

1.0000

MOLDOVA – LEU

16.9930

MONGOLIA – TUGRIK

2642.9200

MONTENEGRO – EURO

0.8720

MOROCCO – DIRHAM

9.5300

MOZAMBIQUE – METICAL

61.5300

MYANMAR – KYAT

1535.0000

NAMIBIA – DOLLAR

14.3500

NEPAL – RUPEE

111.6000

NETHERLANDS – EURO

0.8720

NETHERLANDS ANTILLES – GUILDER

1.7800

NEW ZEALAND – DOLLAR

1.4900

NICARAGUA – CORDOBA

32.3000

NIGER – CFA FRANC

568.6500

NIGERIA – NAIRA

361.0000

NORWAY – KRONE

8.6800

OMAN – RIAL

0.3850

PAKISTAN – RUPEE

138.6000

PALAU – DOLLAR

1.0000

PANAMA – BALBOA

1.0000

PAPUA NEW GUINEA – KINA

3.2840

PARAGUAY – GUARANI

5956.0000

PERU – NUEVO SOL

3.3750

PHILIPPINES – PESO

52.4900

POLAND – ZLOTY

3.7530

PORTUGAL – EURO

0.8720

QATAR – RIYAL

3.6400

ROMANIA – NEW LEU

4.0690

RUSSIA – RUBLE

69.6800

RWANDA – FRANC

890.0000

SAO TOME & PRINCIPE – NEW DOBRAS

21.5350

SAO TOME & PRINCIPE – DOBRAS

20941.0080

SAUDI ARABIA – RIYAL

3.7500

SENEGAL – CFA FRANC

568.6500

SERBIA – DINAR

103.3900

SEYCHELLES – RUPEE

13.5500

SIERRA LEONE – LEONE

8620.0000

SINGAPORE – DOLLAR

1.3610

SLOVAK REPUBLIC – EURO

0.8720

SLOVENIA – EURO

0.8720

SOLOMON ISLANDS – DOLLAR

7.7520

SOMALI – SHILLING

575.0000

SOUTH AFRICA – RAND

14.3500

SOUTH SUDANESE – POUND

153.7000

SPAIN – EURO

0.8720

SRI LANKA – RUPEE

182.6000

ST LUCIA – EC DOLLAR

2.7000

SUDAN – SUDANESE POUND

47.0000

SURINAME – GUILDER

7.5200

SWAZILAND – LILANGENI

14.3500

SWEDEN – KRONA

8.9380

SWITZERLAND – FRANC

0.9840

SYRIA – POUND

515.0000

TAIWAN – DOLLAR

30.5880

TAJIKISTAN – SOMONI

9.3500

TANZANIA – SHILLING

2295.0000

THAILAND – BAHT

32.3500

TIMOR – LESTE DILI

1.0000

TOGO – CFA FRANC

568.6500

TONGA – PA’ANGA

2.1730

TRINIDAD & TOBAGO – DOLLAR

6.7700

TUNISIA – DINAR

3.0090

TURKEY – LIRA

5.2830

TURKMENISTAN – NEW MANAT

3.4910

UGANDA – SHILLING

3705.0000

UKRAINE – HRYVNIA

27.7000

UNITED ARAB EMIRATES – DIRHAM

3.6730

UNITED KINGDOM – POUND STERLING

0.7810

URUGUAY – PESO

32.3200

UZBEKISTAN – SOM

8310.0000

VANUATU – VATU

111.6900

VENEZUELA – BOLIVAR – SOBERANO

563.9800

VENEZUELA – BOLIVAR – FUERTE

248832.0000

VIETNAM – DONG

23190.0000

WESTERN SAMOA – TALA

2.5350

YEMEN – RIAL

480.0000

ZAMBIA – NEW KWACHA

11.9000

ZIMBABWE – DOLLAR

1.0000

FBAR Legislative History | FBAR Tax Attorney Minneapolis

Exploring the FBAR legislative history is not just a theoretical adventure which should interest only legal scholars. Rather, the FBAR legislative history allows us to understand the theoretical and historical basis for the high FBAR penalties and the legal arguments that may serve best to combat the imposition of these severe penalties.

FBAR Legislative History: The Bank Records and Foreign Transactions Act and the Bank Secrecy Act

The obligation to file a Report of Foreign Bank and Financial Accounts (FBAR) originated from the Bank Records and Foreign Transactions Act, which, together with subsequent amendments, is commonly known as the Bank Secrecy Act.

The Bank Secrecy Act (BSA) was first enacted in 1970. The BSA created various financial reporting obligations to identify and collect evidence against money laundering, tax evasion and other criminal activities. One of these reporting obligations is U.S. Code Title 31, Section 5314 which directly discusses what became known as the FBAR.

31 U.S.C. §5314 requires a U.S. person to file reports and keep records regarding this person’s foreign financial accounts maintained with a foreign financial institution: “the Secretary of the Treasury shall require a resident or citizen of the United States or a person in, and doing business in, the United States, to keep records, file reports, or keep records and file reports, when the resident, citizen, or person makes a transaction or maintains a relation for any person with a foreign financial agency.” The statute identifies the basic information required to be reported on FBAR and authorizes the U.S. Department of Treasury to prescribe the requirements, including identifying the classes of persons who should file FBARs and the threshold amount triggering this reporting requirement.

FBAR Legislative History Prior to 2001

Prior to 2001, the FBAR legislative history does not reflect any major changes. In fact, the most important development in the FBAR legislative history prior to 2001 came not from Congress, but from the United States Supreme Court.

Prior to 2001, the BSA required that, in order to impose civil and criminal FBAR penalties, the U.S. government had to prove willful failure to file an FBAR. Here is where the Supreme Court made its decisive contribution in Ratzlaf v. United States, 510 U.S. 135, 149 (1994). In that case, the Court established the willfulness standard as a “voluntary, international violation of a known legal duty”. The Court further held that merely structuring a transaction to avoid the applicability of the BSA did not constitute willfulness.

In other words, after 1994, the DOJ (the U.S. department of Justice) had to show that the defendant structured the transactions with knowledge that such structuring was in itself unlawful. Such a high standard was difficult to satisfy and the FBAR-related indictments became relatively rare.

FBAR Legislative History After 2001

The terrorist attacks on September 11, 2001, resulted in significant changes in the FBAR legislative history which propelled the FBAR to its current prominence. Let’s focus on three such changes.

1. USA PATRIOT Act

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) charged the U.S. Treasury Department with improving FBAR enforcement, particularly with respect to illegal offshore banking activities. The USA PATRIOT Act reflected the Congress’s findings that terrorist funding was successfully concealed through offshore banking activities which provided secrecy and anonymity of the parties involved. It is worth noting that the focus of the USA PATRIOT Act was still on the money-laundering and terrorist activities, not tax enforcement.

The USA PATRIOT Act further required the Treasury Department to submit recommendations to improve FBAR policies and procedures.

2. Treasury Reports and the Delegation of FBAR Enforcement to the IRS

In response to the Congress’ request, the Treasury Department released three reports between 2002 and 2004. The importance of these reports lies in the evolution of the FBAR role from the original purpose of fighting terrorism to international tax compliance.

The first report was released in 2002 complained that, due to the small probability of imposition of civil penalties and limited FBAR filing guidance, compliance with the FBAR was lower than 20% (in retrospect, this was still a very generous assessment because FBAR compliance was, in reality, much lower). Therefore, the Treasury Department outlined a number of objectives to improve FBAR policies and procedures, such as improving forms, enhancing outreach and strengthening enforcement.

Most importantly, for the first time, the Treasury Department suggested delegating the enforcement of civil FBAR penalties from FinCEN to the IRS. While nothing yet expressly suggested in the FBAR legislative history that FBAR should be used for tax enforcement, it is difficult to interpret the Treasury Department’s report in any other way. At the very least, the first report hinted at such a possibility.

The second report issued by the Treasury Department (in 2003) was much more direct. The report noted that the civil enforcement of FBAR was already delegated to the IRS and contained the key statement: “one could argue the FBAR is directed more towards tax evasion, as opposed to money laundering or other financial crimes, that lie at the core mission of FinCEN”. This was the first time the IRS officially stated the true purpose of FBAR in the post-9/11 world.

It is worth noting that the final report of the Treasury Department (issued in 2004) happily related to the Congress that the FBAR filings had increased in 2003 by 17% from the year 2000 as a result of the IRS enforcement action, confirming the correctness of the Department’s original objectives stated in the first report.

3. American Jobs Creation Act of 2004

No summary of the post-2001 FBAR legislative history would be complete without discussion of the American Jobs Creation Act of 2004 (“2004 Jobs Act”). The 2004 Jobs Act was enacted partially as a result of the Treasury Department’s reports and its complaints about the difficulty of imposing civil sanctions for a failure to file FBAR and partially seeking an increase revenue. As a result of the 2004 Jobs Act, the Congress made one of the most important changes to FBAR by significantly increasing the FBAR penalties, including the imposition of a non-willful penalty for up to $10,000 per violation.

FBAR Legislative History: New FBAR Deadline Starting 2016 FBAR

The most recent change in the FBAR Legislative History came from the innocently-sounding “The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015″ that was enacted on July 31, 2015. As a result of this new law, starting with the 2016 FBAR, the FBAR deadline moved from June 30 to April 15 (with an extension possible for the first time in the FBAR legislative history).

Contact Sherayzen Law Office for FBAR Legal and Tax Help

If you have not complied with the FBAR requirement in the past or you need to determine whether FBAR applies in your situation, contact Sherayzen Law Office for professional help. We have helped hundreds of US taxpayers around the world with their FBAR compliance and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Usefulness of FBARs for the IRS and DOJ | International Tax Law Firm

The usefulness of FBARs for the U.S. tax enforcement agencies may seem to be an odd issue, but, in reality, it concerns every taxpayer with foreign bank and financial accounts. Why the FBAR is important and how the IRS and the U.S. Department of Justice (“DOJ”) utilize it in their prosecution tactics is the subject of this essay.

Two Periods of the Usefulness of FBARs

In describing the usefulness of FBARs, one can distinguish two distinct periods of time. The first period lasted from the time FBAR came into existence in the 1970s through most of the year 2001. It is definitely a simplification to place this entire period of time into one category, but this simplification is intentional in order to contrast this first period of usefulness of FBARs with the second one.

The second period commenced right after the FBAR enforcement function was turned over to the IRS in 2001 and it continues through the present time. In this period of time, the usefulness of FBARs was expanded to a completely different level. It is important to point out, however, that it has not lost its original usefulness that dominated the first period of time of its existence.

Usefulness of FBARs Prior to 2001

Prior to 2001, the main purpose of FBAR had been the enforcement leverage in prosecution of financial crimes. This leverage came from the draconian FBAR penalties which often would offer a worse outcome than the statute associated with a criminal activity (especially after a plea deal). Moreover, it was much easier for prosecutors to establish an FBAR violation (any failure to report a foreign account on the FBAR would do) than to prove specific criminal activity.

The usage of FBAR prosecutions was particularly useful in money laundering cases where it was difficult to prove specified unlawful activities and certain criminal tax cases where it was difficult to establish the receipt of illicit income. In such criminal cases, instead of charging criminals solely with tax evasion or money laundering activities, the prosecutors would opt for charging the criminals with a (willful and/or criminal) failure to file an FBAR that occurred while the defendants engaged in a criminal activity. It was easier to get a plea deal this way, because, obviously, criminals would not report the foreign accounts used in a criminal activity on FBARs.

Why was the usefulness of FBARs limited to being an enforcement leverage; in other words, why were FBARs not used for collection of data? After all, FBAR was born out of the Bank Secrecy Act and its stated purpose was to collect data with respect to foreign bank and financial accounts owed by US persons.

The answer is fairly simple – there was no third-party verification mechanism for the data submitted on FBARs. In other words, the FBAR reporting was completely dependent on honest self-reporting (in fact, this is one of the reasons for the creation of FATCA) and, unless, an investigation was conducted with respect to a specific individual, there was no direct way for FinCEN to corroborate the information submitted on FBARs.

It is important to emphasize that, in this first period of its existence, the usefulness of FBARs was primarily non-tax in nature. It was not until after September 11, 2001, that FBAR commenced to acquire a new level of usefulness with which we are familiar today.

Usefulness of FBARs After 2001

The usefulness of FBARs underwent a tremendous change after the September 11, 2001 terrorist attacks in the United States. Soon after the 9/11 attacks, the enforcement of FBARs was taken away from FinCEN and given to the IRS.

The IRS decided to shift the scope of the usefulness of FBARs from financial crimes to tax evasion. The Congress wholeheartedly agreed and further expanded the already-severe FBAR penalties in the American Jobs Creation Act of 2004 to their current draconian state. From that point on, FBAR became the top international tax compliance enforcement mechanism for the IRS.

The potential FBAR penalties were so extreme that even non-willful taxpayers preferred to enter IRS Offshore Voluntary Disclosure Program (and, later, Streamlined Compliance Procedures) and pay the appropriate Offshore Penalties rather than to directly confront the potential consequences of FBAR noncompliance. In other words, the usefulness of FBARs expanded further to indirect tax enforcement.

Furthermore, the UBS case victory in 2008 and the enaction of FATCA in 2010 meant that the IRS could now obtain FBAR-required information from third parties (foreign financial institutions) and verify a taxpayer’s compliance with the FBAR requirements. This further reinforced the FBARs already dominant position in US international tax compliance.

This FBARs dominance in the tax enforcement with respect to foreign accounts continues even today despite the appearance of a rival – Form 8938 (born out of FATCA). While Form 8938 has a broader scope of reportable assets, its penalty structure is highly inferior to the terrifying FBAR penalties.

Contact Sherayzen Law Office for Help with FBAR Compliance

If you have foreign bank and financial accounts that were not disclosed on FBARs as required, you should contact Sherayzen Law Office, Ltd. as soon as possible. Sherayzen Law Office is an experienced international tax law firm that has helped hundreds of US taxpayers with their delinquent FBARs, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

No FBAR Penalty Option

No FBAR Penalty is the result that every taxpayer wishes to achieve. Indeed, having no FBAR penalty is a realistic objective, but only in certain situations. One of such situations is currently offered by the IRS through Delinquent FBAR Submission Procedures.

History of the IRS Procedures Regarding No FBAR Penalty Option

There is a relatively long history behind the option that taxpayers with delinquent FBARs would be charged no FBAR penalty. It comes from the traditional link between income tax noncompliance and the imposition of an FBAR penalty. Prior to 2009 OVDP, the No FBAR Penalty option was unofficial, but very much part of the IRS tradition in situations where a taxpayer would not have any additional U.S. tax liability as a result of his voluntary disclosure of foreign accounts.

The rules for the 2009 IRS Offshore Voluntary Disclosure Programs (“2009 OVDP”) finally officially recognized the No FBAR Penalty option in the answer to Question #9. The FAQ #9 also for the first time properly stated the legal philosophy behind the No FBAR Penalty option: “The purpose for the voluntary disclosure practice is to provide a way for taxpayers who did not report taxable income in the past to voluntarily come forward and resolve their tax matters.” Hence, if a taxpayer “reported and paid tax on all taxable income but did not file FBARs, do not use the voluntary disclosure process.” Rather, the taxpayer was urged to file the FBARs directly with the explanation of why the FBARs were filed late.

Both, the 2011 IRS Offshore Voluntary Disclosure Initiative (“2011 OVDI) and 2012 Offshore Voluntary Disclosure Program (“2012 OVDI) again reinforced the No FBAR Penalty with FAQ #17: “The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and you have not previously been contacted regarding an income tax examination or a request for delinquent returns.”

On June 18, 2014, with the creation of 2014 Offshore Voluntary Disclosure Program (“2014 OVDP”), the IRS removed the 2014 OVDP FAQ #17 and replaced it the modern official No FBAR Penalty option called Delinquent FBAR Submission Procedures.

No FBAR Penalty Option under the Delinquent FBAR Submission Procedures

Under the Delinquent FBAR Submission Procedures, the IRS promises not to impose FBAR penalties for the failure to file the delinquent FBARs if three requirements are met: (1) the taxpayer 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; (2) the IRS has not contacted the taxpayer previously regarding an income tax examination (civil or criminal) for the years for which the delinquent FBARs are submitted; and (3) the IRS has not previously requested from the taxpayer the FBARs for the years for the years for which the delinquent FBARs are submitted.

If all three requirements are met, the taxpayers can pursue Delinquent FBAR Submission Procedures by filings the delinquent FBARs with FinCEN directly. A statement explaining why the FBARs are filed late must be provided to the IRS.

Contact Sherayzen Law Office to Explore Your No FBAR Penalty Options

Delinquent FBAR Submission Procedures is probably one of the most popular No FBAR penalty options, but it is a limited one because it is not always possible to comply with all three of the formal requirements of the Procedures. Thankfully, these Procedures are not the only No FBAR Penalty Option offered by the IRS.

This is why, if you have undisclosed foreign accounts, you should contact the experienced international tax law firm of Sherayzen Law Office. We will thoroughly explore your case, analyze your No FBAR penalty and voluntary disclosure options, choose the disclosure route that best balances your risks and rewards, prepare all of the required legal documents and tax forms, and defend your case against the IRS. We have helped hundreds of U.S. taxpayers around the world and we can help You!

Contact Us Today to Schedule Your Confidential Consultation!