Do you need to file an FBAR for a Dematerialized (demat) Account?
Because there is not quite a US domestic analogue, there is confusion over whether or not a ‘demat account’ needs to be reported on a report of foreign bank account (FBAR) form.
Offshore Bank Expert Attorney Anthony Parent Creates New Video about the June 2013 FBAR Update
The Helpful Video, which is Posted on YouTube, Explains What the Latest FBAR Update Means for Taxpayers
Anthony Parent, the founder of IRS Medic at Parent and Parent, a firm of tax attorneys who are devoted to helping their clients with tax-related issues, has just created a new video titled “June 2013 FBAR Update.” The in-depth video, which the FBAR attorney has posted on YouTube, explains in great detail what the latest FBAR update means for taxpayers.
As you probably know, the IRS has a new focus on FBAR penalty enforcement. Because of the strange history of the form and the Bank Secrecy Act, many people can’t quite figure out what what all of this means. In order to help you understand the most essential facts, here is list of 5 things you must absolutely know about FBAR Penalty negotiations.
Tens of thousands of taxpayers, and tax professionals decided to ignore warnings by the IRS and created a reporting scheme often called soft or quiet disclosure, something done by amending his past tax returns and filing delinquent tax FBARs without participating in the Offshore Voluntary Disclosure Program (OVDP). These crafty taxpayers looked at the FBAR-equivalent penalties (5-27.5%o f highest account value) and thought they were too high and ignored IRS warnings. They hoped when they put all their foreign account information on an IRS form, they could cross their fingers and the IRS might leave them alone.
With all the FBAR news coming out, I thought it would be a good idea to do a quick video to go over some of the bigger FBAR?OVDP news developments.
In this two-part video series, I :
(1) give a quick overview the FBAR form and its filing requirements
(2) describe the IRS crackdown on so-called soft or quiet disclosures
(3) report on news that the IRS has made no efforts to educate expatriate or recent immigrants, dual citizen, resident aliens, and VISA holders,
(4) mention FBAR education resources for tax payers, tax professionals and estate planning attorneys, and
(5) explain why many CPAs and attorneys have stopped dabbling in OVDI cases, and (6) advise those who filed under the 2009 that they have a limited amount of time to claim a penalty reduction.
Switzerland’s bank secrecy laws have protected clients’ names and accounts for years, in effect allowing such clients to squirrel their finances away to avoid their own country’s tax laws. In 2009 the UBS case shed light on how one of Switzerland’s premier banks would knowingly assist its clients in schemes to avoid taxes. Even after the resolution of the UBS case the Swiss banking regime steadfastly retained its bank secrecy laws; laws which, when broken, carried potentially serious consequences for the breaching party. Most recently the Swiss government requested that Spain extradite one Herve Falciani, to face trial in Spain for his breach of bank secrecy laws, but Spain refused to grant the request because the Spanish court considered Switzerland’s secrecy laws, at least in Falciani’s circumstances, to run contrary to important EU public policy considerations.
By: AMY L. HOLBROOK, Esq
The United States Government Accountability Office (GAO, an independent entity that exists to audit, evaluate, and investigate federal government activities to support Congress) has just released a report to Congress on offshore tax evasion and its findings regarding the 2009 program data and results.The full report can be found here: http://www.gao.gov/assets/660/653369.pdf and has some fascinating metrics and data collation regarding the first OVDP from 2009.
In unsettling news for US persons who have not disclosed the existence of foreign accounts to the IRS, Herve Falciani, an IT worker at HSBC’s Geneva branch, stole the names of 24,000 HSBC customers with private accounts and in 2008 he gave that data to Christine Lagarde, the former Finance Minister of France, and current head of the International Monetary Fund. Lagarde shared that list – often referred to as the “Lagarde List” – with the IRS and several EU authorities. As a result of the revelation, many HSBC account holders now face the threat of prosecution for tax evasion by the IRS and have a limited amount of time to come clean or risk detection.
Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts, aka “The FBAR” is a complicated form with complicated instructions. Making the problem worse is that the penalties for failing to follow the 2013 FBAR filing requirements are severe. This article will discuss the basics –- the who, what, where, and when of FBAR Filing Requirements.
The IRS has invested millions of dollars and has hired thousands of special auditors to conduct FBAR audits on US taxpayers that it suspects of not filing FBAR forms or filing incorrect FBAR forms. For taxpayers who haven’t filed FBARs or who have filed incorrect FBARs, the situation is daunting.
Not only are FBAR penalties not based on income but rather, calculated on the highest account balances. Additionally, the IRS and Department of Justice is seeking to make an example of those who haven’t filed FBAR correctly.
The good news, that if handled correctly, the risks of an FBAR audit can be diminished, allowing the IRS to move on to other targets.