Offshore Voluntary Disclosure Program (OVDP)
If you have delinquent FBARs or other foreign information returns, you may qualify for the offshore voluntary disclosure program. If you have a financial interest in or signature authority over a foreign financial account, such as a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the value of which in aggregate exceeds certain thresholds, you may be required to report the account yearly to the Department of Treasury by filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).
Who must file an FBAR
With certain exceptions, “United States persons” are required to file an FBAR if:
- the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
The term “United States person” includes: U.S. citizens; U.S. residents; entities such as corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
On January 9, 2012, the IRS reinitiated its Offshore Voluntary Disclosure Program after the closure of the 2011 and 2009 programs. The Offshore Voluntary Disclosure Program offers people with unreported taxable income from offshore financial accounts or other foreign assets an opportunity to fulfill their tax and information reporting obligations, including the FBAR, form 8938, form 5471, form 3520 and 3520A.
Click here to read more about the streamlined filing compliance procedures.
What penalties could I face for failure to timely file an FBAR?
The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation.
Contact an Offshore Voluntary Disclosure Tax Attorney Today
If you have questions about the FBAR filing requirements or the OVDP, contact Disparte Tax Law today for a free consultation.