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Why Is It Important to Adhere to FBAR Reporting?

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Today it is known worldwide that April 15th is an essential date for tax deadline. However, one more tax reporting date that is known but is often evaded by some taxpayers is June 30th.

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Why Is It Important to Adhere to FBAR Reporting?

  1. 1. Why Is It Important to Adhere to FBAR Reporting ? LeadFormix Confidential
  2. 2. Today it is known worldwide that April 15th is an essential date for tax deadline. However, one more tax reporting date that is known but is often evaded by some taxpayers is June 30th. This is a date by which all the United State citizens are required to file a Foreign Bank Account Report (FBAR, Form TD F 9022.1) with the Department of the Treasury in order to report overseas bank account. In the recent times, the IRS Amnesty has pursued the taxpayers that were involved in abusive overseas transactions. These taxpayers have often tried to evade FBAR reporting or the U.S income tax by hiding the income in overseas banks, brokerage accounts or by making use of nominee entities. The taxpayers also avert the taxes by making use of overseas debit cards, credit cards, foreign trusts, wire transfers, employee leasing schemes, private annuities or the insurance plans. In order prevent such incidents, the FBAR report filing need was set up. The FBAR was established as a tool to assist IRD and the Department of Treasury investigators keep a track of the funds that are used for illegal purposes or to recognize the unreported income that are maintained or generated overseas. According to the FBAR guidelines, the reportable financial accounts include the following:  Bank accounts i.e. Saving, Current, Fixed Deposit and many more  Securities or brokerage account  Account with a person that acts as a broker/dealer for forthcoming transactions  Account with a person in the business of accepting deposits as a financial agency  Insurance or annuity policy with cash value (LIC, ULIP)  Public provident fund or PF  Shares in a mutual fund or similar pooled fund  Gold kept in locker facility provided by the bank Hence, to have a streamlined FBAR filing and be free from penalties, it is suggested that you resort to the expert corporate compliance service provider that offers services such as: Consultation and impact Analysis  Analysis and planning to minimize FBAR Penalty  AMT Strategies and Foreign Tax Credit  Mutual Fund or PFIC computations  Form preparations needed for participating in OVDP program LeadFormix Confidential
  3. 3.  Preparation of Tax Amendments and Delinquent FBAR However, the penalties for failing to file FBARs are stern. There is a bare minimum $10,000 penalty in case the failure was inadvertent. However, if the taxpayer is found guilty of willingly not reporting the FBAR, then the minimum fine is $100,000 or half the value of the account, whichever is greater. Read More about: Individual Tax Forms And Publications, tax planning for 2013, India Capital Gains Tax, Foreign Bank Account Tax LeadFormix Confidential

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