Filing Late FBAR for 2014 and 2015: Steps and Considerations

U.S. citizens and residents with foreign financial accounts exceeding $10,000 at any time during the calendar year are required to file a Foreign Bank Account Report (FBAR) or FinCEN Form 114. If you missed the deadline for 2014 and 2015, you may still file a late FBAR. Here’s what you need to know and do.

Preparation of Your FBARs

The first step is to prepare and file your FBARs for the years 2014 and 2015. You have the option to file them electronically through the Financial Crimes Enforcement Network (FinCEN) website. Make sure to complete the forms accurately and in accordance with the instructions provided.

Reason for Late Filing

If the IRS or FinCEN contacts you regarding the late filing, it is crucial to provide a reasonable explanation. A solid justification is essential to avoid or mitigate potential penalties.

Potential Penalties

Be aware that late filing can result in substantial penalties. However, if you can prove 'reasonable cause' for the delay, you might be able to avoid or reduce these penalties. Reasonable cause examples include illness, unforeseeable emergency, or accounting errors.

Consult a Tax Professional

For the best results, consult a tax professional or an attorney specializing in international tax law. They can provide valuable advice and help you navigate the legal complexities of the situation.

Voluntary Disclosure Option

Consider the IRS’s Voluntary Disclosure Program (VDP). This is a program designed to assist taxpayers who have underreported foreign assets or foreign financial activities. If you are concerned about penalties, discussing the VDP with a tax professional is highly recommended.

Streamlined Filing Compliance Process

If you have neither reported foreign assets under FBAR nor foreign income on your original tax returns and can prove that your non-compliance was due to non-willfulness, you should opt for the Streamlined Filing Compliance Process. This process is designed to simplify the process for those with past non-compliance.

Offshore Voluntary Disclosure Programme (OVDP)

If non-willfulness is not applicable, you may need to participate in the Offshore Voluntary Disclosure Programme (OVDP). This program requires a thorough review and a detailed assessment of your compliance history.

Conclusion

While filing a late FBAR may be necessary, it is important to act quickly and consult experts to ensure compliance and minimize any potential penalties. Be peaceful and proactive in resolving your situation with the IRS or FinCEN.

For more detailed information on this topic, you can download my free special report on the IRS Streamlined Process. Further reading and expert advice will help you navigate the complexities of late FBAR filings successfully.

Keywords: FBAR, Late Filing, Streamlined Filing Compliance, Voluntary Disclosure, IRS, FinCEN, Non-Willfulness, Foreign Financial Accounts, Tax Compliance, U.S. Tax Law