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Yes, you still need to file the FBAR if your accounts fall into the amount for required filing.
For taxpayer at the highest penalty category the penalty is 27.5% of the highest aggregate balance during the full eight years prior to the disclosure.
That is not to say that the IRS will automatically apply a penalty for not filing the form.
If you have been reporting the interest on the accounts and including them in your US return then the IRS may grant abatement from the penalty.
For a taxpayer with offshore accounts that, in aggregate, don’t surpass $75,000 in any calendar year a 12.5% penalty rate would apply.
12.5 % of maximum aggregate balance if the value of account does not surpass $75000
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could you answer my last question
The penalty would be on the value of the account(s)
The % is lowered if the value is not more then $75000
Not a % of the value
but then 12.5 % of something
12.5% of the value would be the penalty owed
That would be the penalty amount
Let me put it a different way
so if account has say 12000, it would be 12.5 % of 12000
Yes, The IRS would drop the penalty to the 12.5% instead of the higher
but there is no way to estimate the possible penalty
If your accounts are less than the $75,000 then use the 12.5% of your account values
That would be your estimate
The IRS will determine whether the violation was due to reasonable cause based on all the facts and circumstances. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case. Since the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.
You will need to explain why you did not file the FBAR
ok, and there is no way that this will be waived if this is non willful
The IRS will determine whether the violation was due to reasonable cause based on all the facts and circumstances. Taxpayer’s explanation for why he failed to timely file an FBAR appears reasonable in view of the facts and circumstances of the case. Since the IRS determined that the FBAR violation was due to reasonable cause, no FBAR penalty will be asserted.You will need to explain why
Your next question is most likely what is reasonable cause.
As you were filing you knew it was required, so you would need an extenuating circumstance. That is really going to be difficult too because you say you knew the info to add the amount to the filing of the returns themselves.
As you did include the income (that is great) then you could just give the true reason and request they abate based on your past compliannce
There is a good chance that they will not apply penalty especially as it is one year and you have included the income
In my case my reason was lack of understanding on to FBAR requirements,
as I did disclose these accounts earlier
There is a good chance that they will not apply penalty especially as it is one year and you have included the income, they do understand that it is confusing
and thought the disclosure is one time thing unless new accounts are generated
Then tell them that exactly and remind that you did include on the actual tax return
ok, Do you offer services in writing such explanations
Just Answer is a question and answer site only with no contact outside the site. I can say that the simpler the better.
Do insurance polices count towards 10000 limit
If they are annuities yes. Most accounts outside the US are counted. Let me look for specifics on Insurance. One sec.......
A foreign life insurance policy is now reportable as a “foreign financial account” if the insurance policy is owned by a U.S. person and the policy has a cash surrender value. The reporting requirement applies to the policy owner, if he/she is a U.S. person.
so must have a cash surrender value
FBAR requirement to foreign annuity policies that have a cash surrender value and are owned by U.S. persons. Under the new regulations, such annuity policies are considered a “foreign financial account”, reportable via the FBAR by the policy owner. Such annuities are reportable even if they are deferred annuities and there are no present annuity payments.
or sum assured
thank you for your assistance
You are most welcome
The fact that you included is your best help