Offshore accounts are nothing new, but many people are not entirely sure how to report these things to the IRS. The benefits of having these accounts include increased protection and privacy in many cases. On the other hand, failure to report these assets can be troublesome. Anyone with foreign or offshore accounts must file a Report of Foreign Bank and Financial Accounts (FBAR) if those accounts have more than $10,000.
Are you uncertain what to do about penalties associated with reporting of foreign bank and accounts (FBAR)? An attorney can provide assistance with your case to help you avoid serious penalties. If you are not familiar with Baltimore FBAR penalties, a tax attorney can provide crucial assistance.
The penalties required by the IRS will depend on whether it is determined that the taxpayer was willful or not willful in the incompliance. Non-willful penalties in Baltimore can add up to $16,536 for each unfiled FBAR form, and this figure can rise each year based on inflation. Penalties do not stack according to the number of accounts involved. Whether a taxpayer has one foreign account or three foreign accounts, the penalty will remain the same.
On the other hand, willful incompliance penalties are much higher. The penalties can amount to over $165,000 or half of the balance of the accounts, whichever is higher. This calculation is based on the number of accounts. Taxpayers may face several penalties if they have more than one foreign account.
Delaying filing of an FBAR in Baltimore has similar penalties. One thing to keep in mind is that these penalties do stack by the year. A taxpayer may face four different penalties if they delay filing an FBAR four years in a row. This applies to both willful and non-willful incompliance with IRS law.
It is important to file an FBAR as soon as possible, even if it is already delayed. Filing now rather than next year means that a taxpayer will spend less money on penalties and potentially avoid criminal charges for fraud or tax evasion.
One way that a Baltimore lawyer can help reduce FBAR penalties is to demonstrate that the action was not willful. They may argue that their client did not disclose the accounts because they did not know that they had to or because they misunderstood the threshold required to report their accounts. If the issue is related to an honest mistake, there are still penalties. However, they are much less severe for these parties.
An attorney is able to negotiate with the IRS and state agencies on behalf of taxpayers. An attorney can use strategy to argue down penalties, especially when their clients demonstrate a desire to pay the penalties and get back on track with their tax responsibilities.
While foreign and offshore accounts do offer a number of benefits, they do require care. You can continue to protect your assets while also ensuring that you are in compliance with federal and state laws.
If you have questions about Baltimore FBAR penalties, it is important to secure legal assistance. Schedule a consultation with Whiteford Tax Defense today to learn more about tax defense strategies that can help you reduce your penalties.