Foreign Account Tax Compliance

The attorneys at the Arkansas-based firm of Hyden, Miron & Foster, PLLC regularly assist clients with matters relating to foreign and offshore financial accounts.  While rules pertaining to foreign accounts differ from domestic accounts in many ways, certain information must be disclosed to the federal government.  Failure to report these accounts can lead to financial penalties and criminal charges.  Our attorneys can advise you on the best way to mitigate penalties for failure to report foreign accounts.

The regulation of foreign and offshore accounts used to be sparse but this is no longer the case. The Internal Revenue Service (IRS) has put a new compliance initiative in place to attempt to enforce the laws relating to these types of accounts.  The IRS wants individuals and entities to comply with the laws from past years and going forward.  The IRS is continuously working with overseas banks and other financial institutions to obtain information on American individuals and entities with offshore accounts.

The Bank Secrecy Act requires that those in possession of or with signatory authority over foreign financial accounts, that have a total value of $10,000 or more (combined if more than one account), report these accounts and any earnings there from to the U.S. Department of Treasury. If the requirements are met for reporting, the individual or entity must also keep certain records relating to these accounts. 

The required report is called a Foreign Bank Account Report or FBAR.  The report is submitted online through the Financial Crimes Enforcement Network (FinCen) website. Failure to file an FBAR may lead to civil and criminal penalties.  Fines of up to half of the total value of an account can be assessed and prison terms of up to ten years can be mandated in some cases.   

When a client is delinquent in filing an FBAR, they have multiple options.  If they have not been contacted by the IRS in relation to the offshore account, are not being investigated and had reasonable cause for not filing the FBAR, they may use a method called Quiet Disclosure.  If the IRS agrees that the cause for not filing is reasonable, they may not impose penalties.  Those who have failed to file an FBAR, but have not done so willfully, may be eligible for Streamlined Filing.  This is an independent process put in place in order to assess the taxes and any penalties the individual or entity faces at a faster pace than a traditional audit.  Lastly, the Offshore Voluntary Disclosure Program can assist those that are delinquent to voluntarily report their foreign accounts and lessen the chance of criminal prosecution.  

With offices located in Little Rock, Conway and Hot Springs Village, Arkansas, the attorneys at Hyden, Miron & Foster, PLLC can help you resolve past, present and future issues relating to offshore and foreign financial accounts.  Call us at 501-482-1787 for a consultation.

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901 N. University Avenue, Little Rock, AR 72207 | Phone: 501.482.1787 | 557 Locust Avenue, Conway, AR 72034 | Phone: 501.482.1787
3880 N. Highway 7, Hot Springs Village, AR 71909 | Phone: 501.482.1787 | 721 S Main Street Stuttgart, AR 72160 | Phone: 870.673.0083