Delinquent FBAR Submission Procedures
If you have delinquent FBAR (Foreign Bank Account Report) submissions, there are three options available:
- Delinquent FBAR Submission Procedures
- Streamlined Domestic Offshore Procedures
- Streamlined Foreign Offshore Procedures
Below is a summary of each option. It’s essential to evaluate each before deciding on an approach.
Delinquent FBAR Submission Procedures
- Three Conditions to Use This Process:
- You have not filed a required Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN Form 114, previously Form TD F 90-22.1).
- You are not under a civil examination or a criminal investigation by the IRS.
- You have not already been contacted by the IRS about the delinquent FBARs.
- Conditions for No Penalty:
- Proper reporting and payment of all tax on the foreign income.
- No prior IRS contact about the delinquent returns or an income tax examination.
Streamlined Domestic Offshore Procedures
- For U.S. taxpayers residing in the United States.
- Must file amended tax returns for the previous three years and FBARs for the previous six years.
- A miscellaneous offshore penalty equal to 5% of the highest aggregate balance or value of the foreign financial assets is imposed.
Streamlined Foreign Offshore Procedures
- For U.S. taxpayers residing outside the United States.
- Must file amended tax returns for the previous three years and FBARs for the previous six years.
- No offshore penalty is imposed.
Delinquent FBAR Submission Procedures:
- All delinquent FBARs must be filed without a specific time limitation.
The key difference between the Delinquent FBAR Submission Procedures and Streamlined Domestic Offshore Procedures or Streamlined Foreign Offshore Procedures is that all delinquent FBARs must be filed, not just those from the past six years.