What To Know if You Missed the October 15 FBAR Deadline in 2022Offshore Account Update
Posted on October 17, 2022 | Share
The deadline to file a Report of Foreign Bank and Financial Accounts (FBAR) for the 2021 tax year was October 15, 2022. Taxpayers who had qualifying offshore accounts in 2021 and failed to file an FBAR by October 15 are now delinquent. If you find yourself in this situation, here is what you need to know:
5 Facts To Know if You Missed the October 15, 2022 FBAR Deadline
1. You Should Make Sure You Were Required to File
The obligation to file an FBAR only applies to taxpayers who have qualifying “foreign financial accounts.” To trigger the FBAR filing requirement in 2022, a taxpayer’s foreign financial accounts must have exceeded $10,000 in aggregate value at some point during the 2021 tax year. If your offshore bank accounts did not exceed this threshold in 2021, then you weren’t required to file an FBAR by October 15.
2. Simply Filing a Late FBAR is Not a Good Option
Some people assume that if they missed the October 15 deadline, they can simply file late and move on. But, generally speaking, this is not a good option. If you file a late FBAR, not only will you be subject to the full delinquency penalties, but your delayed filing could trigger IRS scrutiny.
3. There Are Two Primary Options for Remedying Delinquent FBARs
Taxpayers who fall behind on their FBAR filing obligations have two primary options. But, each of these options are available in different circumstances, and choosing the wrong option can have similar consequences to submitting a late FBAR. As a result, taxpayers need to choose how to proceed very carefully. The primary options for remedying delinquent FBARs are:
- Non-Willful FBAR Filing Delinquencies – If you can certify that your failure to file is non-willful, you may be able to mitigate your risk by utilizing the IRS’ Streamlined Filing Compliance Procedures.
- Willful FBAR Filing Delinquencies – If you cannot certify to non-willfulness, you could be at risk for criminal prosecution, and avoiding prosecution may mean taking advantage of the IRS’ Voluntary Disclosure Program.
4. If You Do Nothing, You Could Face an IRS Audit or Criminal Tax Fraud Investigation
Since filing late can lead to IRS scrutiny and utilizing the IRS’s Streamlined Filing Compliance Procedures and Voluntary Disclosure Program both present risks, some taxpayers may simply choose to do nothing. But, this too is inadvisable. If you ignore your delinquent FBAR status and the IRS uncovers your delinquency on its own initiative, you could face a comprehensive IRS audit or criminal tax fraud investigation—and this could lead to substantial penalties.
5. If You Are Delinquent on Your FBAR Filing Obligations, You May Also Be Delinquent on IRS Form 8938
Finally, it is important to note that if you are behind on your FBAR filing obligations, you may be behind on your IRS Form 8938 filing obligations as well. This form requires disclosure of qualifying “foreign financial assets.” These assets include (but are not limited to) foreign financial accounts that taxpayers must disclose on their FBARs.
Discuss Your Offshore Bank Account Disclosure Options with Tax Attorney Kevin E. Thorn
If you need advice about how to handle a delinquent FBAR filing, we encourage you to contact us promptly for more information. To schedule a consultation with tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 201-842-7696, email firstname.lastname@example.org or tell us how we can reach you online today.