Late last month the IRS announced an attractive new FBAR program for U.S. taxpayers living abroad. The program is open to those who have FBAR unreported foreign income resulting in $1,500.00 or less in unpaid tax each year. Unlike the IRS’s 2012 Offshore Voluntary Disclosure Program, which imposes nonreporting penalties of as high as 27.5% of foreign account balances, the new program does not impose any FBAR penalties.
The new program requires that participating taxpayers file three years of amended income tax returns and six years of late Form 90-22.1, Report of Foreign Bank and Financial Accounts (commonly referred to as the “FBAR Form”). However, unlike the Offshore Voluntary Disclosure Program, this new program does not provide protection from criminal prosecution if the IRS and Department of Justice determine that the taxpayer’s particular circumstances warrant prosecution.
All U.S. taxpayers with unreported foreign financial accounts should seek the advice of qualified tax counsel concerning the new program.
Stephen J. Pieklik of the Pittsburgh tax law firm Williams Coulson has succesffuly advised many clients with respect to foreign financial account matters, including the 2009 Offshore Voluntary Disclosure Program, the 2011 Offshore Voluntary Disclosure Initiative, the 2012 Offshore Voluntary Disclosure Program, and this new program.