Delinquent FBAR

victoriaguy · Post by **victoriaguy** » Thu Feb 19, 2015 6:20 pm

Hi there,

I am doing tax returns for a family member. He filed all his FBARs up to 2012 last year, and I told him to wait until we got his streamlined procedure application done to submit his last one, so now that one is late. Now we've discovered he's not eligible for the streamlined procedure.

The OVDP won't help, as he only has one delinquent year, so either way, it looks like he'd owe a minimum of $150,000 penalties for his 15 accounts!! We've phoned the IRS, and the very helpful agent I happened to speak to basically told us there was nothing to help us except opting out of OVDP and taking our chances.

BUT I just found this article that implies that if no tax were owed, there will be no FBAR penalties. Has anyone heard of this? Is it for real??

http://www.forbes.com/sites/stephendunn ... ent-fbars/

I'm uneasy trusting this, but if it's really for real, we'd really like to get him compliant.

Thanks a lot.

DaveM · Post by **DaveM** » Thu Feb 19, 2015 7:56 pm

The IRS statement referenced seems pretty clear:
http://www.irs.gov/Individuals/Internat ... Procedures

If the person in question did timely pay the taxes and is a Canadian resident, then he is likely way down on the list of the IRS priorities. Though I'm no expert, but have spent a lot of time learning about this over the last year, my guess is that the above IRS statement would apply.

I can't help asking how could the last date have been missed after apparently a lot of work went into bringing the prior one's up to date?

DaveM · Post by **DaveM** » Thu Feb 19, 2015 8:19 pm

I've never been able to understand why there has never been any kind of IRS hotline that could give reasonably accurate information on offshore account matters. IRS helplines are no help on the matter and even international tax accountants are not sure about a lot of the subject.

victoriaguy · Post by **victoriaguy** » Fri Feb 20, 2015 4:27 am

Thanks, Dave.

Yeah, we were nervous about submitting until the Streamlined Procedure were ready, as taxpayers are ineligible for the Streamlined Procedure if the IRS contacts you before you contact them. Having never been in the States, we have no experience with the degree to which different departments cross-examine their data. But it's a moot point as we do now already understand it would have been better to file the FBAR.

Thanks for the link to the delinquent FBAR procedure!