Filing a Foreign Bank Account Report (FBAR) is mandatory for all persons and businesses operating accounts outside the United States. If you fail to file a FBAR, you can face either criminal or civil penalties.
The criminal penalties include:
• A fine of $250,000 or 5 years imprisonment or both for an intentional failure to file a FBAR.
• A fine of $500,000 and/or 10-year imprisonment if the willful failure to file a FBAR violated other written laws. The fine also occurs if the failutre to file was to promote illegal activities in the country.
The criminal penalties compound with collateral consequences as outlined below:
• You can lose your right to vote.
• Your professional license can be revoked.
• You can lose your right to be in possession of arms.
• You can lose your job.
• If you are a holder of a green card, you can be deported to your country of origin upon completion of your jail term.
The civil penalties classify into a three-tier system as follows:
• If the failure took place after October 22, 2004, you can receive a penalty of up to $100,000 or 50% of the foreign account balance as at the time of committing the violation. The said penalty will continue to gain for each year that you do not file a FBAR.
• If the failure was as a result of an oversight, a penalty of $10,000 will be imposed on you for each violation.
• The failure is due to a reasonable cause such as poor communication skills for immigrants or lack of financial knowledge. You can get a waiver from payment of a civil penalty.
If you wish to get help on how to file a FBAR, feel free to contact us here and we will be more than willing to help you.