FBAR Lawyers: Any lawyer can claim to be an attorney who specializes in FBAR. But, there are only a handful of international tax FBAR Lawyers who are Board-Certified Tax Law Specialists with advanced degrees and +20-years legal experience tax/law that specialize exclusively in foreign account and asset compliance. In the past 10-years, the IRS has significantly increased enforcement of offshore and foreign asset and account tax matters. When a U.S. person (includes more than just individuals) has more than $10,000 in annual aggregate total of foreign accounts on any given day, they may have an FBAR filing requirement. If the account holder has not filed the FBAR timely, they may be subject to civil penalties and possibly criminal penalties — although the latter is rare. The only time a US Person may need an FBAR Attorney is when they have not filed FBARs in one or more previous years and want to submit to one of the Voluntary Disclosure or FBAR Amnesty Programs — or have been issued a penalty notice.
We have an entire website dedicated to FBAR filing and compliance.
What is the FBAR?
The FBAR is FinCEN Form 114. It was developed by FinCEN in 1970 but it is enforced by the IRS.
Who has to File the FBAR?
US Persons who meet the annual aggregate total threshold for filing may have an FBAR reporting requirement.
FinCEN defines a U.S. Person as:
- “United States Person. United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, 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. Note. The federal tax treatment of an entity does not determine whether the entity has an FBAR filing requirement.
What is the FBAR Filing Threshold?
The threshold kicks-in when a US Person has ownership, co-ownership or signature authority over more than $10,000 in annual aggregate total of foreign accounts.
When is the FBAR Due?
The FBAR is due to be filed in April, to coincide with the due date for filing a tax return. FBAR filing is on automatic extension through October — so there is no requirement to file an extension form.
What Types of Accounts
All types of bank and financial accounts are included. It includes account a US person has ownership (aka Financial Interest) or Signature Authority such as:
- Bank Accounts
- Investment Accounts
- Foreign Pension Accounts
- Life Insurance
- Mutual Funds
What Happens if You Don’t File the FBAR Timely?
If you do not file, you may be subject fines and penalties.
Civil penalties can be broken down further into willful penalties and non-willful penalties. Criminal penalties are also possible — but again, not very common.
Can I Just Start Filing FBAR This Year Instead?
No, unless the current year is the first-year you had an FBAR Reporting requirement.
If you had a prior year reporting requirement, but only begin to start filing in the current year (Filing Forward) it is illegal. In the world of offshore disclosure, this is referred to as an FBAR Quiet Disclosure.
The IRS has warned taxpayers that if they get caught in a FBAR Quiet Disclosure situation, it may lead to willful penalties and even a criminal investigation by the IRS Special Agents.
FBAR Amnesty Program
The FBAR Amnesty Programs are programs developed by the Internal Revenue Service to assist Taxpayers who are already out of compliance for non-reporting.
Some of the more common programs, include:
- Voluntary Disclosure Program (VDP or “New” OVDP)
- Streamlined Domestic Offshore Procedures
- Streamlined Foreign Offshore Procedures
- Delinquency Procedures
- Reasonable Cause
FBAR Lawyer Fees
Experienced Streamlined Offshore counsel always charge flat-fees and not hourly fees for IRS FBAR matters
It avoids inexperienced counsel from puffing up your bill and charging you for nonsense services that should be bundled into a flat-fee service (tax and legal).
Low Up-Front Hourly Fee Bait-and-Switch FBAR Attorney Fees
When an attorney is too inexperienced in FBAR Offshore cases, they will utilize hourly fees and outside CPAs in order to puff up the bill and charge you for services that should be bundled into a flat-fee model. They charge a low up-front retainer to entice you, but ultimately, you end up paying more in the long-run as the attorney keeps burning through and replenishing the retainer.
For example: You are preparing to speak with your attorney who is charging you hourly.
Here is how the hourly attorneys charge you:
- Review the case (charge)
- Prepare for the call (charge)
- Speak with you (charge)
- “Discuss” with their staff, if they have any staff (charge)
- Write up a file summary (charge)
- Send you an email summary (charge)
- They think about the matter again on the drive home (charge)
- And they prepare an updated summary (charge)
- Review new correspondence from the IRS (charge)
- Prepare & “analyze” correspondence before calling the IRS (charge)
- Waiting on hold for an hour with the IRS (charge)
- Email you to say they couldn’t get through (charge)
- Call the IRS again the next day, on hold for another hour (charge)
- Email you to say the call was unsuccessful (charge)
- Now, you are concerned so you call them to discuss. Leave a voicemail because you can’t get through, and you also email a follow-up.
- Listen to your voicemail and read your email (charge)
- Re-review your file to prepare before calling you (charge)
- And the cycle repeats (charge, replenish retainer, repeat)
Then, after paying this inexperienced attorney thousands of dollars, you start losing confidence and realize you need to hire someone else and start all over again. It is better (for your peace of mind and also your wallet) to just go to an experienced lawyer right from the start, to take care of the matter for you.
*Here is a real-life example of how the bait-and-switch works.
Our team has developed a highly-effective representation fee model that is used by other experienced law firms across the globe.
How to Hire an FBAR Lawyer
All Streamlined tax and legal preparation (and other offshore compliance matters) should be handled in-house by a Board-Certified Tax Lawyer Specialist and their team.
The entire matter from beginning-to-end should be flat-fee, full-service, and all-inclusive. Each client has a unique story, with their own specific facts and circumstances. No two Streamlined cases are the same and fees should be representative of that specific client’s case.
Fees should only be determined after the Attorney has spoken in detail with the client — and not some prefabricated fee.
International Tax Lawyer Specialist Team: Golding & Golding
Contact our firm today for assistance.