Foreign Accounts: FBAR and FATCA Basics

Unreported foreign accounts carry penalties up to 50% of the account balance. Per account. Per year. Here is how to get compliant before it gets worse.

By Darrin T. Mish, Attorney

The Stakes

Non-willful FBAR penalties: up to $10,000 per account per year. Willful: up to $100,000 or 50% of balance per account per year. These penalties can exceed the account value. The IRS and DOJ are actively pursuing foreign account cases.

The Fix

The Streamlined Filing Compliance Procedures offer reduced penalties (5% or 0% for overseas residents) for non-willful non-filers. File amended returns for three years and FBARs for six years. Do this before the IRS contacts you.

Foreign account penalties are the most severe in the tax code. The remediation programs are the most generous. The window to use them is still open.

This guide is general information about federal tax law as of its publication date, not legal advice for your situation.