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Jacksonville FBAR Attorney | International Tax Lawyer Florida

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If you reside in Jacksonville, Florida and have unreported foreign bank and financial accounts, you may be looking for a Jacksonville FBAR Attorney.  In this case, you should contact Sherayzen Law Office, Ltd., a leader in FBAR compliance, including offshore voluntary disclosures concerning delinquent. Let’s consider the main reasons for it.

Jacksonville FBAR Attorney: International Tax Lawyer

From the outset, it is very important to understand that, by looking for Jacksonville FBAR attorney, in reality, you are searching for an international tax lawyer who specializes in FBAR compliance.

The reason for this conclusion is the fact that FBAR enforcement belongs to a very special field of US tax law – US international tax law. FBAR is an information return concerning foreign assets, which necessarily involves US international tax compliance concerning foreign assets/foreign income. Moreover, ever since the FBAR enforcement was turned over to the IRS in 2001, the term FBAR attorney applies almost exclusively to tax attorneys.

Hence, when you look for an FBAR attorney, you are looking for an international tax attorney with a specialty in FBAR compliance.

Jacksonville FBAR Attorney: Deep Knowledge of US International Tax Law and Offshore Voluntary Disclosures

When retaining Jacksonville FBAR attorney, consider the fact that such an attorney’s work is not limited only to the preparation and filing of FBARs. Rather, the attorney should be able to deliver a variety of tax services and freely operate with experience and knowledge in all relevant areas of US international tax law, including the various offshore voluntary disclosure options concerning delinquent FBARs.

Moreover, as part of an offshore voluntary disclosure, an FBAR Attorney often needs to amend US tax returns, properly prepare foreign financial statements according to US GAAP, correctly calculate PFICs, and complete an innumerable number of other tasks.

Mr. Sherayzen and his team of motivated experienced tax professionals of Sherayzen Law Office have helped hundreds of US taxpayers worldwide to bring their tax affairs into full compliance with US tax laws. This work included the preparation and filing of offshore voluntary disclosures concerning delinquent FBARs. Sherayzen Law Office offers help with all kinds of offshore voluntary disclosure options, including: SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), IRS VDP (IRS Voluntary Disclosure Practice) and Reasonable Cause disclosures.

Jacksonville FBAR Attorney: Out-Of-State International Tax Lawyer

Whenever you are looking for an attorney who specializes in US international tax law (which is a federal area of law, not a state one), you do not need to limit yourself to lawyers who reside in Jacksonville, Florida. On the contrary, consider international tax attorneys who reside in other states and help Jacksonville residents with their FBAR compliance.

Contact Sherayzen Law Office for Professional FBAR Help

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including FBARs. While our office is in Minneapolis, Minnesota, we help taxpayers who reside throughout the United States, including Jacksonville, Florida.

Thus, if you are looking for a Jacksonville FBAR Attorney, contact Mr. Sherayzen as soon as possible to schedule Your Confidential Consultation!

2024 FBAR Deadline in 2025 | FinCEN Form 114 International Tax Lawyer & Attorney

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The 2024 FBAR deadline is a critical deadline for US taxpayers this calendar year 2025. What makes FBAR so important are the draconian FBAR penalties which may be imposed on noncompliant taxpayers. Let’s discuss the 2024 FBAR deadline in more detail.

2024 FBAR Deadline: Background Information

The official name of FBAR is FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. US Persons must file FBAR if they have a financial interest in or signatory or any other authority over foreign financial accounts if the highest aggregate value of these accounts is in excess of $10,000. FBARs must be timely e-filed separately from federal tax returns.

Failure to file an FBAR may result in the imposition of heavy FBAR penalties. The FBAR penalties vary from criminal penalties and willful penalties to non-willful penalties. You can find more details about FBAR penalties in this article.

2024 FBAR Deadline: Pre-2016 FBAR Deadline

For the years preceding 2016, US persons needed to file FBARs by June 30 of each year. For example, the 2013 FBAR was due on June 30, 2014. No filing extensions were allowed. The last FBAR that followed the June 30 deadline was the 2015 FBAR; its due date was June 30, 2016. .

2024 FBAR Deadline: Changes to FBAR Deadline Starting with the 2016 FBAR

For many years, the strange FBAR filing rules greatly confused US taxpayers. First of all, it was difficult to learn about the existence of the form. Second, many taxpayers simply missed the unusual FBAR filing deadline.

Therefore, the US Congress took action in 2015 to alleviate this problem. As it usually happens, it did so when it passed a law that, on its surface, had nothing to do with FBARs. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Act”) changed the FBAR deadline. Starting with 2016 FBAR, Section 2006(b)(11) of the Act requires the FBARs to be filed by the due date of that year’s tax return (i.e. usually April 15), not June 30.

Furthermore, the IRS granted to US taxpayers an automatic extension of the FBAR filing deadline to October 15. For now, taxpayers do not need to make any specific requests in order for an extension to be granted.

Thus, starting with the 2016 FBAR, the Act adjusted the FBAR due date to coincide with the federal income tax filing deadlines. This is the case even if federal law requires a different filing date. For example, in situations where the tax return due date falls on a Saturday, Sunday, or legal holiday, the IRS must delay the due date until the next business day; the FBAR deadline will follow suit and also shift to the next business day.

2024 FBAR Deadline

Based on the current law, for the vast majority of filers, the 2024 FBAR deadline will be April 15, 2025. However, the deadline is automatically extended to October 15, 2025.

The 2024 FBAR must be e-filed through the US Financial Crimes Enforcement Network’s (FinCEN) BSA E-filing system.

Contact Sherayzen Law Office for Professional Help With Your FBAR Compliance

If you have unreported foreign accounts, contact Sherayzen Law Office as soon as possible. Sherayzen Law Office is a leader in US international tax compliance and offshore voluntary disclosures. We have successfully helped hundreds of US taxpayers around the globe with their FBAR compliance and FBAR voluntary disclosures; and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

FinCEN Form 114 Indian Financial Accounts Obligations | FBAR Attorney

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FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, commonly known as  “FBAR”, is one of the most important requirements that Indian Americans face as part of their US tax compliance concerning their Indian Financial Accounts. This articles provides an overview of the  Indian American’s FBAR compliance requirements with the particular focus on the FinCEN Form 114 Indian Financial Accounts obligations.

FinCEN Form 114 Indian Financial Accounts: FBAR Background Information

FinCEN Form 114 is a critical requirement for any US person with financial accounts outside the United States. US citizens, residents, and even certain non-residents who have a financial interest or signature authority over foreign financial accounts must file an FBAR if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.

FBAR was introduced in the early 1970s as part of the Bank Secrecy Act.  Its original purpose was to combat money laundering, tax evasion, and other illicit activities involving undisclosed foreign financial assets. After the 9/11 terrorist attacks, however, Congress turned over the FBAR enforcement to the IRS, effectively turning FBAR into a tax form and one of the most formidable enforcement tools in the IRS arsenal.

What makes FinCEN Form 114 such a great US international tax enforcement weapon is the combination its broad scope of compliance, its low reporting threshold and, most importantly, its draconian noncompliance penalties.  FBAR penalties range from criminal penalties (i.e. a person can actually go to jail for FBAR noncompliance in certain limited circumstances) to horrendous civil willful penalties (imposed on a per account per year basis) to even non-willful penalties.  

While the Supreme court limited in 2023 the non-willful penalties to $10,000 (as adjusted for inflation) per form, FBAR has a statute of limitations of six years. This means that a non-willfulness penalty assessed after January 25, 2024 (until sometime at the end of the January of 2025) can still total $96,702 (inflation is accounted for in this number through the end of 2024).

FinCEN Form 114 Indian Financial Accounts: FBAR’s Broad Definition of “Account”

I mentioned above that the broad scope of FBAR compliance is one of the form’s characteristics that makes it so dangerous. The foundation for the far reach of the form stems from the FBAR’s broad definition of what constitutes a reportable “account” “Account” can be applied a huge variety of financial arrangements including but not limited to:

  • Bank accounts (such as savings and checking accounts)
  • Fixed-deposit accounts (each one individually is a separate account)
  • Mutual funds
  • Pension accounts (including the Indian PPF accounts)
  • Insurance policies with a cash-surrender value
  • Precious metal accounts
  • Retirement accounts

Basically, any type of a arrangement that involves a fiduciary relationship with a financial institution (which is itself a term of art with a broad definition) with respect to your assets immediately raises a possibility of additional FinCEN Form 114 compliance.  

It is crucial to note that the FBAR filing requirement applies not only to accounts where a US person is the sole owner but also to accounts where they have joint ownership or signature authority. Even accounts where a person only has signing authority, such as an employer’s account, are subject to the FinCEN Form 114 reporting requirement if the $10,000 threshold is met.

FinCEN Form 114 Indian Financial Accounts: Special Challenges in the Context of India

In the specific context of Indian Financial Accounts, such a broad definition of accounts for FinCEN Form 114 purposes leads to unique compliance challenges. Let’s discuss the three most common challenges. First of all, Indian FBAR filers tend to have a very large number of fixed-deposit and Indian mutual fund accounts as long-term savings financial vehicles. Many Indians think that they only have to report only main checking and savings bank accounts.  This is an important error. FBAR filers need to disclose each fixed-deposit and mutual fund account individually.

Second, Indian FinCEN Form 114 filers generally do not think of life insurance policies as something that they need to disclose.  Yet, the FBAR requires the disclosure of each life insurance policy individually.

Third, FBAR filers must disclose Public Provident Fund (“PPF”) accounts on their FBARs.  Many Indian Americans completely forget about these accounts.

I should also mention one more important point about these unique challenges – income tax compliance concerning all of these accounts that many Indian FBAR filers tend to overlook. India has a very different system of taxation from the United States and, usually, a failure to disclose accounts properly on FBAR is also a good indicator of potential US income tax noncompliance.

FinCEN Form 114 Indian Financial Accounts: Offshore Voluntary Disclosure

Now that we have identified the problem, let’s discuss how to best deal with FinCEN Form 114 noncompliance.  First of all, this is an issue that you should discuss with an international tax attorney who can advise on the best course of action based on the specific facts of your case.

One of the common advices that you will receive from your international tax attorney is to engage in an Offshore Voluntary Disclosure option. Offshore Voluntary Disclosure is a reflection of the fact that the IRS cannot possibly audit every single US income tax return. Hence, the IRS offers various offshore voluntary disclosure programs that allow noncompliant US taxpayers to come forward and report their unreported foreign financial accounts and other foreign assets in exchange for a more lenient treatment.

An offshore voluntary disclosure can be a highly-beneficial solution for prior noncompliance. At the same time, it is a highly-complex process that requires extensive knowledge of US tax laws.

Moreover, in the context of FinCEN Form 114 Indian Financial Accounts noncompliance, there are specific challenges that arise from the income tax treatment concerning Indian fixed-deposit accounts as well as Indian mutual fund investments (something that I alluded to above).

In these situations, working with an experienced international tax attorney who understands the intricacies of US tax reporting of Indian financial accounts is crucial. An attorney can help you navigate the voluntary disclosure process and minimize your exposure to penalties.

Contact Sherayzen Law Office for Professional Help with Your FinCEN Form 114 Indian Financial Accounts Compliance

Sherayzen Law Office is a premier US international tax law firm that specializes in FBAR compliance and offshore voluntary disclosures. We have an extensive experience with US tax reporting concerning Indian bank and financial accounts, including in the context of various offshore voluntary disclosure options such as Streamlined Domestic Offshore Procedures, Streamlined Foreign Offshore Procedures, Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures, Reasonable Cause disclosures, et cetera. By working with Sherayzen Law Office, you ensure that your compliance with US tax laws is handled thoroughly and professionally with the goal of protecting you from potential penalties.

Contact Sherayzen Law Office today to schedule your confidential consultation!

2024 FBAR Civil Penalties | FBAR International Tax Lawyer & Attorney

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This article is an update of prior articles on the FBAR Civil Penalties. Since the US Congress mandated the IRS to adjust FBAR civil penalties for inflation on an annual basis, this article discusses the year 2024 FBAR Civil Penalties.

2024 FBAR Civil Penalties: Overview of the FBAR Penalty System

FinCEN Form 114, the Report of Foreign Bank and Financial Accounts (commonly known as “FBAR”), has always had a very complex, multi-layered system of penalties, which has grown even more complicated over the years. These penalties can be grouped into four categories: criminal, willful, non-willful and negligent.

Of course, the most dreaded penalties are FBAR criminal penalties. Not only is there a criminal fine of up to $500,000, but, in some cases, a person can be sentenced to 10 years in prison for FBAR violations (and these two criminal penalties can be imposed simultaneously). Since the focus of this article is on FBAR civil penalties.

The next category of penalties are FBAR civil penalties imposed for the willful failure to file an FBAR. These penalties are imposed per each violation – i.e. on each account per year, potentially going back six years (the FBAR statute of limitations is six years).

The third category of penalties are FBAR penalties imposed for a non-willful failure to file an FBAR or a filing of an incorrect FBAR. These penalties can be imposed on US persons who do not even know that FBAR exists.

Finally, with respect to business entities, a penalty can be imposed for a negligent failure to file an FBAR or a filing of an incorrect FBAR.

It is important to note that FBAR has its own reasonable cause exception that may be used to fight the assessment of any of the aforementioned civil penalties. Moreover, each of these penalty categories has numerous levels of penalty mitigation that a tax attorney may utilize to lower his client’s FBAR civil penalties.

2024 FBAR Civil Penalties: Penalties Prior to November 2 2015

Prior to November 2, 2015, FBAR penalties were not adjusted for inflation and stayed flat at the levels mandated by Congress. Let’s go over each category of penalties prior to inflation adjustment.

As of November 1, 2015, Willful FBAR penalties were up to $100,000 or 50% of the highest balance of an account, whichever is greater, per violation. Again, a violation meant a failure to correctly report an account in any year. Non-willful FBAR penalties were up to $10,000 per violation per year; per US Supreme Court’s decision last year, the penalty should have been imposed on a per form (not per account) basis. Finally, FBAR penalties for negligence were up to $500 per violation; if, however, there was a pattern of negligence, the negligence penalties could increase ten times up to $50,000 per violation.

2024 FBAR Civil Penalties: Inflation Adjustment

The situation changed dramatically in 2015. As a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“2015 Inflation Adjustment Act”), Congress mandated federal agents to: (1) adjust the amounts of civil monetary penalties with an initial “catch-up” adjustment; and (2) make subsequent annual adjustments for inflation. The inflation adjustment applied only to civil penalties.

The “catch-up” adjustment meant a huge increase in penalties, because federal agencies were required to update all of these penalties from the time of their enactment (or the last year Congress adjusted the penalties) through November of 2015. This meant that, in 2015, the penalties jumped to account for all accumulated multi-year inflation. The catch-up adjustment was limited to two and a half times of the original penalty.

Fortunately, the Congress adjusted FBAR penalties in 2004 and the “catch-up” adjustment did not have to go back to the 1970s. It still meant a very large (about 25%) increase in FBAR civil penalties, but it was not as dramatic as some other federal penalties.

2024 FBAR Civil Penalties: Bifurcation of FBAR Penalty System

The biggest problem with the inflation adjustment, however, was the fact that it further complicated the already dense multi-layered FBAR system of civil penalties – FBAR penalties became dependent on the timing of a violation and IRS penalty assessment. In essence, the 2015 Inflation Adjustment Act split the FBAR penalty into two distinct parts.

The first part applies to FBAR violations that occurred on or before November 2, 2015. The old pre-2015 FBAR penalties described above applies to these violations irrespective of when the IRS actually assesses the penalties for these violations. The last FBAR violations definitely eligible for the old statutory penalties are those that were made concerning 2014 FBAR which was due on June 30, 2015. The statute of limitations for the 2014 FBAR ran out on June 30, 2021.

The second part applies to all FBAR violations that occurred after November 2, 2015. For all of these violations, the exact amount of penalties will depend on the timing of the IRS penalty assessment, not when the FBAR violation actually occurred. In other words, if an FBAR violation occurred on October 15, 2017 and the IRS assessed FBAR penalties June 17, 2021, the IRS would use the inflation-adjusted FBAR penalties as of the year 2021, not October 15, 2017.

2024 FBAR Civil Penalties: Penalties Assessed On or After January 25, 2024

Now that we understand the history of FBAR penalties, we can specifically discuss the 2024 FBAR Civil penalties. The first thing to understand is that we are talking about penalties assessed by the IRS on or after January 25, 2024; prior to that date, the 2023 FBAR civil penalties were still effective.

The 2024 Willful FBAR penalty imposed under 31 U.S.C. §5321(a)(5)(C)(i)(I) is $161,166 per violation. Per last year’s court decisions, the term “violation” in the context of willful FBAR penalties means on a “per account for each year” basis described above.

The 2024 Non-Willful FBAR penalty imposed under 31 U.S.C. §5321(a)(5)(B) is $16,117 per violation. The term “violation” in the context of non-willful FBAR penalties at this point has been settled to mean “per form” (rather than per-account) basis.

The 2024 Negligence FBAR penalty imposed under 31 U.S.C. §5321(a)(6)(A) is $1,394; if there is a pattern of negligence under 31 U.S.C. §5321(a)(6)(B), then the penalty goes up to $108,489.

Contact Sherayzen Law Office for Professional Help With Your Prior FBAR Noncompliance

Sherayzen Law Office is a leader in US international tax law and FBAR compliance. We have successfully helped hundreds of clients from over eighty countries resolve their prior FBAR noncompliance, including through various voluntary disclosure programs (such as Streamlined Domestic Offshore Procedures, Streamlined Foreign Offshore Procedures, Delinquent FBAR Submission Procedures, et cetera). We can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Singapore Solution Fraud Scheme Co-Creator Pleads Guilty |  SDOP lawyer Minneapolis

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On December 21, 2023, the IRS and the US Department of Justice announced that Mr. Rolf Schnellmann, a Swiss national, pleaded guilty to conspiring to defraud the United States for his role in the creation and implementation of a fraud scheme related to foreign accounts and foreign income called “Singapore Solution”.  In this small essay, I will discuss the Singapore Solution, the facts of the Schnellmann case and the lessons one can draw from this case.

Singapore Solution: Basic Description of the Tax Evasion Scheme

The idea behind the Singapore Solution is fairly simple. Funds owned secretly (i.e. without a proper disclosure to the IRS on FBAR, Form 8938, et cetera) by US persons in a Swiss bank are first transferred to a series of nominee accounts in other jurisdictions (for example, Hong Kong). In the meantime, the Swiss bankers established (usually indirectly through a law firm) a Singapore-based asset management firm which opens new bank accounts in its name in the Swiss bank. After passing through nominee accounts, the US-owned funds are returned to the Swiss bank and placed in the new bank accounts opened by the asset management firm.

In other words, the Singapore Solution basically represents a circular scheme where the ownership of funds is artificially obscured by involvement of third parties. Obviously, the US owners of the undisclosed funds handsomely compensated the Swiss bankers, the managers of the asset management firm and the nominees for their work. Also obviously, this scheme crosses the line between asset/tax planning and criminal tax evasion.

Singapore Solution: Basic Facts of Schnellmann Case

According to court documents and statements made in court, Rolf Schnellmann was the head of Allied Finance Trust AG, a Zurich-based financial services company and a subsidiary of the Allied Finance Group in Liechtenstein.  Between 2008 to 2014, Schnellmann and his co-conspirators helped high-net-worth US taxpayers set-up and implement the Singapore Solution concerning their undeclared bank accounts at Privatbank IHAG Zurich AG (IHAG), a Swiss private bank. 

According to the Department of Justice, Schnellmann and his colleagues transferred more than $60 million from the US-owned undeclared IHAG bank accounts through a series of nominee accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that Schnellmann helped establish. IHAG participated in the 2013 IRS Voluntary Disclosure Program for Swiss Banks. Surely, as a result of this process, IHAG disclosed a lot of information concerning the Singapore Solution.  This allowed the IRS to track down not only the noncompliant US clients of that bank, but also the Singapore Solution creators and facilitators, like Mr. Schnellamann.  He was arrested in August of 2023 in Italy and extradited to the United States.

The IRS Criminal Investigation (IRS-CI) conducted the investigation with the help of the US Justice Department’s Office of International Affairs, Interpol, Italian law enforcement authorities, the Prosecutor General’s Office of Trieste and the Italian Ministry of Justice.

Singapore Solution: Consequences of the Guilty Plea for Schnellmann

As a result of the guilty plea, Mr. Schnellmann is scheduled to be sentenced on July 19, 2024. He now faces a maximum penalty of five years in prison, a period of supervised release, restitution and monetary penalties.

Singapore Solution: Lessons

The Schnellmann case and the Singapore Solution that he co-authored allow us to deduce certain lessons.  The first and most obvious, one must respect the difference between legitimate even if aggressive tax planning and criminal tax evasion.  Mr. Schnellmann crossed that line and will pay a high price for it.

Second, US taxpayers must declare their foreign accounts to the IRS on FBAR, Form 8938 and Schedule B of Form 1040.  Failure to do so may bring very painful consequences in the form of high IRS civil and even criminal penalties.

Finally, there is really no safe place for noncompliant taxpayers to hide. Even if they have been lucky to avoid IRS detection of their noncompliance so far, a disclosure from third parties may lead to an IRS investigation that may ultimately result in the discovery of the noncompliance.  In this case, the IRS will most likely impose very heavy penalties for noncompliance (made even heavier by the fact that the IRS had to invest a lot of resources and man-hours into the case).

Contact Sherayzen Law Office for Professional Help With the Voluntary Disclosure of Your Undisclosed Foreign Assets and Foreign Income

For all of these reasons, noncompliant taxpayers should explore their offshore voluntary disclosure options before the IRS finds out about their noncompliance. Otherwise, an IRS audit will make it impossible for them to lower their IRS noncompliance penalties through a voluntary disclosure.

Sherayzen Law Office is a leader in the IRS offshore voluntary disclosures, including disclosures that involve foreign income noncompliance and foreign asset reporting noncompliance (on FBAR, Form 8938, 3520, 3520-A, 5471, 8865, 8858, et cetera).  Led by Mr. Eugene Sherayzen, a highly-experienced international tax attorney, our international tax team has helped hundreds of US taxpayers around the globe to bring their tax affairs into full compliance with the IRS while lowering and sometimes even eliminating IRS penalties.

Contact Us Today to Schedule Your Confidential Consultation!