On November 19, 2019, the IRS announced changes to the current FBAR filing verification submission process. The change is technical, but not without importance.
New FBAR Filing Verification Submission Process: FBAR Background Information
FBAR is a common name for FinCEN Form 114 (formerly known as TD F 90-22.1), Report of Foreign Bank and Financial Accounts. US Persons must use this form to report their ownership of or signatory authority or any other authority over foreign bank and financial accounts as long as these accounts’ aggregate balance exceeds the FBAR filing threshold. Despite its official name, the IRS has administered the form since 2001, not FinCEN.
FBAR is one of the most important US international information returns. FBAR noncompliance may lead to the imposition of severe civil and criminal penalties. Hence, it is of absolute importance for US persons to timely and properly file this form.
New FBAR Filing Verification Submission Process: Rules Prior to November 19 2019
Prior to November 19, 2019, US persons who wanted to verify whether their FBARs were filed could obtain the relevant information for up to five FBARs by simply calling 1-866-270-0733 (the IRS FBAR Hotline) and selecting option 1. IRM 126.96.36.199.13(4). In this case, the IRS representatives would provide the verbal verification for free. The filers could make this request sixty days after the date of filing. Id.
If, however, a filer wished to request information concerning more than five forms or he wanted to obtain paper copies of filed FBARs, then he would need to do so in writing. For written verifications, there was a $5.00 fee for verifying five or fewer forms and a $1.00 fee for each additional form. Id. The IRS charged $0.15 per copy of the entire FBAR. Id. Written requests should have been accompanied by payment in accordance with IRM 188.8.131.52.13(4)(b).
New FBAR Filing Verification Submission Process: New November 19 2019 Rules
On November 19, 2019, the IRS issued a memorandum which contained interim guidance concerning the process by which the IRS would accept the requests for FBAR filing verifications. The memorandum introduced the following revisions to the FBAR filing verification process.
Effective as of the date of this memorandum, the IRS no longer accepts verbal verification requests; all requests must be submitted in writing. Hence, the existing fee structure in IRM 184.108.40.206.13(4)(b) now applies to all verification requests.
The IRS has stated that this procedural change is necessary to provide documentary evidence of all verification inquiries and IRS response to them. This new interim guidance will be incorporated into IRM 4.26.16 within the next two years from the date of issuance of the memorandum.
New FBAR Filing Verification Submission Process: Making a Proper Written Request
The written request for FBAR filing verification should include the filer’s name, Taxpayer Identification Number, and filing period(s). Tax practitioners requesting verifications for their clients must also make these requests in writing, and provide a copy of the Form 2848, Power of Attorney and Declaration of Representative, authorizing them to receive the FBAR information. The same fee structure as described above (i.e. a $5.00 fee for verifying five or fewer forms, a $1.00 fee for each additional form, and copies for an additional fee of $0.15) will continue to apply. Checks or money orders should be made payable to the “United States Treasury”.
Written requests and payments for FBAR filing verifications and copies of filed FBARs should be mailed to:
IRS Detroit Federal Building
Compliance Review Team
P.O. Box 32063
Detroit, MI 48232-0063
In response to written requests, the IRS will send a letter stating whether the record shows that an FBAR was filed and if so, the date filed. If a copy of a paper-filed FBAR was requested, a copy will be included with IRS letter.
Contact Sherayzen Law Office for Professional Help with FBAR Compliance
The new FBAR filing verification process will be especially relevant in the context of offshore voluntary disclosures. Oftentimes, taxpayers do not have copies of their prior FBARs; and it is necessary to obtain these copies in order to properly calculate the penalty exposure as well as use them as evidence of non-willfulness (or find out if the IRS may use them as evidence of willfulness).
If you are required to file FBARs and you have not done so, contact Sherayzen Law Office for professional help. We have helped hundreds of US taxpayers with their FBAR compliance issues, and We Can Help You!