Late FBAR filings vs. Late Tax filing - letters and matching

coffeepucks · Post by **coffeepucks** » Sun Aug 28, 2011 5:54 pm

I am in the process of filing my FBAR and my taxes. I am attempting to go back 6 years just to be extra cautious - I see a lot of debate and opinions on 3 vs 6, not sure what the best if considering the situation.

As a result I have a couple questions:

1) I understand I need to include a letter stating why I am filing late. Besides ignorance of the requirement I have nothing to state. Any suggestions on a template and/or wording for this letter?

2) Do the years for FBAR filings need to match the years for IRS/Tax filings? I am wondering if I can file 3 years of taxes (I owe nothing) but 6 years of FBAR. Any risks with not matching the years filed?

Thanks in advance.

CdnAmerican · Post by **CdnAmerican** » Tue Aug 30, 2011 12:19 am

Hi coffeepucks - I attached a letter to mine (similar situation; needed to backfile several years of FBAR's). My understanding is that it's reasonable to simply state that you did not know the regulation (if that's true, of course). I read that while searching for help - don't know where I saw it, but apparently this helps build a case for 'reasonable cause.' Here's a link that's kind of related:

http://www.chamberlainlaw.com/assets/attachments/S7.pdf

I don't know about your second question. I would err on the side of caution and backfile both for 6 years, but that is a lot of work.

Good luck!

nelsona · Post by **nelsona** » Tue Aug 30, 2011 8:33 am

Just to let you know -- for 1040 -- why you would file 3 or 6:

If you owe taxes as a result of prepping the last 3 years, you need to file the previous 3 as well.

I would only FBAR for the years I'm filng.

madhoa · Post by **madhoa** » Tue Aug 30, 2011 9:50 am

That link posted is pretty old (2008). A lot has changed in the last 1-2 years in terms of IRS enforcement of FBARs, so it might not be up to date. If you attach a letter, you could also write there that you owe no taxes.

Also, technically, you are supposed to file FBARs even if you have $0 of income.

baby_king_bob · Post by **baby_king_bob** » Tue Aug 30, 2011 12:26 pm

Coffeepucks: give some indication of why you were unaware.

For example: I am a US citizen who has resided in Canada from the age of ten. I have never worked in the US nor had any significant residential or financial ties there. Until the recent media attention regarding FBAR disclosures, I was not aware of my filing requirements.

Keep it simple and humble. Assuming that you have no underreported tax liabilities in the US, people are generally finding that the IRS is being very forgiving towards those making a 'good faith' effort to comply.

Of course, no one can make promises on what will happen subsequent to your filing as the IRS is not bound by legislation to be forgiving.