No, Being in Proximity to the DOT is Not an FBAR Filing Advantage
False Myths About FBAR Filing Advantages
Over the past several years, the Internal Revenue Service has made the enforcement of foreign bank and financial account reporting a key compliance initiative. There have been several FBAR cases litigated in the different circuits across the country on matters involving how penalties can be assessed and enforced. In addition, there was even a recent Supreme Court case that limits the IRS’s ability to penalize taxpayers for non-willful FBAR penalties. Unfortunately, when an area of tax becomes more popular, it brings out less experienced tax attorneys who make false online claims that they are experts in FBAR or FATCA just because they may have handled a handful of cases.
These days, many taxpayers have been goaded into hiring less experienced attorneys because the Attorneys make false representations about their experience or ‘expertise’ – and this can actually put the taxpayer in a worse position than they would ordinarily be in. One question our firm recently received from an unsuspecting taxpayer helped shed light on the nonsense published by ‘self-proclaimed FBAR experts.’
The question was whether or not having a law office in close proximity to the Department of Treasury helps with FBAR filing and makes the attorney an expert in FBAR.
The answer is a resounding…no. Let’s see why this is so.
FBARS are Filed Electronically
Since 2013, FBAR has been filed electronically and directly on the FinCEN website. Therefore, if you are speaking with an attorney and they are posturing that their firm is the only firm for you because they are located in close proximity to the Department of Treasury or another government office then all that should do is let you know that they do not understand the FBAR filing process at all. For example, this FinCEN Notice about mailing FBARs to the DOT refers to an outdated version of the FBAR (TD F 90-22.1)…not used by the U.S. Government for the past 10 years.
If you find a firm that in 2023 is still mailing the older pre-2013 version of the FBAR directly to the Department of Treasury’s office, then it might be a bad sign for things to come for you and your case.
IRS Handles FBAR Audits, Not the Treasury Department
Since around 2003, the Internal Revenue Service has been tasked with enforcing FBAR penalties and violations. While the FBAR is technically filed on a FinCEN Form 114, the Department of Treasury does not handle enforcement procedures. Therefore, if any type of law firm is touting that you should hire them because they are in close proximity to the Department of Treasury – they may be standing outside the building in the cold for a very long time since these types of audits are not handled at the Department of Treasury. Rather, if you were audited for FBAR, it is typically done by IRS correspondence or possibly telephone and even less commonly in person, post-COVID.
How to Find the Right Board-Certified Tax Law Specialist
Any attorney can claim they are an expert. Most of the time, it is just mere puffery by general tax practitioners who have little to no actual experience in foreign bank and financial account reporting. We have additional resources to help you find the best FBAR attorney for you.
Late Filing Penalties May be Reduced or Avoided
For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.
Current Year vs Prior Year Non-Compliance
Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist that specializes exclusively in these types of offshore disclosure matters.
Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)
In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties.
Need Help Finding an Experienced Offshore Tax Attorney?
When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting.
This resource may help taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.
Contact our firm today for assistance.