FBAR Audits, Triggers & the IRS

FBAR Audit:  In recent years, the IRS has significantly increased the number of FBAR Audits for non-compliance with reporting of foreign accounts, assets & investments. If there is also unreported foreign income, the matter can become even more complicated.

While you can find tons of fear mongering and scaremongering sites online — leading you to believe FBAR non-compliance will automatically lead to fines and prison — that is not the case. FBAR Audits are generally civil in nature.

One major cause for increased FBAR audits is bad Streamlined Disclosure lawyering. This has become a bit of an epidemic, with copycat firms popping up online and perpetuating to have experience they do not have.

We have resources to help you if you were misled into the Streamlined Program.

But, even if you never submitted to the streamlined program or other offshore voluntary disclosure program, you may become subject to an FBAR Audit.

Here are a few common situations we come across:

International Business Consultants

Jeff is an international business consultant.

He handles international clients in Taiwan and Hong Kong, and travels to these countries often.

Jeff misapplied his travel expenses and is under audit, when the examiner sends an IDR (Information Document Request) requesting if Jeff has any bank accounts overseas.

It turns out, Jeffrey has a bank account in each country. And, since the interest rates are high, and the income grows tax-free – Jeff has unreported income as well.

Multi-Country Business

Maria has a business in the U.S. The business expanded to multiple foreign countries.

Maria needs to have local accounts in each country, in order to pay her suppliers. Therefore, she has multiple accounts, in different countries.

Maria’s business is under audit, when she also receives an IDR from the examiner asking about Foreign Accounts.

FATCA Reporting

Peter is originally from Australia.

He has multiple accounts in Australia, the UK and India – all places he either lived or worked. One of the accounts in India has significant value, since the interest rate is at nearly 8%. The Bank reports Peter to the IRS – along with thousands of other customers – in accordance with FATCA reporting requirements.

Peter receives an FBAR Audit notice.

Can You Avoid an IRS Audit for Unreported Foreign Accounts?

While you cannot absolutely avoid an audit, you can reduce the chance of penalties by submitting to one of the IRS offshore disclosure programs.

We Specialize in Streamlined & Offshore Voluntary Disclosure

We specialize exclusively in international tax, and specifically IRS offshore disclosure.

We have successfully represented clients in more than 1,000 streamlined and voluntary offshore disclosure submissions nationwide and in over 70-different countries. We have represented thousands of individuals and businesses with international tax problems.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Our lead attorney is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.

How to Hire Experienced Streamlined Counsel?

How to Hire Experienced Offshore Counsel?

Generally, experienced attorneys in this field will have the following credentials/experience:

  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • Dually Licensed as an EA (Enrolled Agent) or CPA
  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience

Interested in Learning More about our Firm?

No matter where in the world you reside, our international tax team can get you IRS offshore compliant.

We specialize in FBAR and FATCA. Contact our firm today for assistance with getting compliant.

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