The 5 Most Common Reasons For FBAR Penalties
The Foreign Bank and Financial Accounts Report (FBAR) is a form that is required to be filed by U.S. taxpayers who have foreign financial accounts. The FBAR is used to help the government detect and combat international money laundering and terrorist financing. If you fail to file the FBAR, you may be subject to civil and criminal penalties.
The most common reasons for FBAR penalties are:
- Failing to file the FBAR
- Filing the FBAR late
- Omitting information on the FBAR
- Incorrectly reporting information on the FBAR
- Failing to sign the FBAR
If you are a U.S. taxpayer with a foreign financial account, it is important to make sure that you file the FBAR correctly and on time to avoid penalties.
Non-filing of the FBAR
One of the most common reasons for FBAR penalties is failing to file the FBAR. The FBAR is required to be filed by U.S. taxpayers who have foreign financial accounts. If you fail to file the FBAR, you may be subject to civil and criminal penalties.
Failure to properly file the FBAR
Another common reason for FBAR penalties is failure to properly file the FBAR. The FBAR must be filed electronically through the Financial Crimes Enforcement Network (FinCEN) website. You must include your name, address, and Social Security number on the FBAR. You must also include the names of all foreign financial institution in which you have an interest, as well as the account numbers for those accounts.
Signing the FBAR under penalties of perjury
When you sign the FBAR, you are declaring under penalties of perjury that the information you have provided is true and correct. If you knowingly and willfully provide false information on the FBAR, you may be subject to criminal penalties.
Filing a joint FBAR when only one spouse has foreign accounts
If you file a joint FBAR, both you and your spouse will be jointly and severally liable for any penalties that may be assessed. This means that if only one spouse has foreign accounts, both spouses may be subject to FBAR penalties.
The civil penalty for non-willful violations
The civil penalty for non-willful violations of the FBAR filing requirements is up to $10,000 per violation. A violation is defined as each year you fail to file the FBAR or each foreign financial account you fail to report on the FBAR.
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