U.S. persons that have an interest of more than $10,000 in foreign financial accounts at any time during the calendar year must file FinCEN Report 114 [Report of Foreign Bank and Financial Accounts (FBAR)]. Failure to do so can result in a penalty of up to $10,000 per form if the failure isn’t due to willful neglect. If the failure is willful, the penalty can be up to the greater of $100,000 or 50% of the highest aggregate account balance for all years under examination.
According to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, these amounts are adjusted for inflation. FinCEN has announced that for penalties assessed after 1/15/17, the maximum FBAR penalty for a nonwillful failure to report has increased from $12,663 to $12,921. The maximum penalty for a willful failure to report has increased from $126,626 to $129,210.
More information is available here.
About ALL CPAs
ALL CPAs is a full-service certified public accounting and business advisory firm located in Chestnut Hill, MA. We specialize in tailoring services to suit the needs of individuals and their families, closely held businesses, business owners and entrepreneurs as well as high net worth clients and nonprofit organizations. In addition to our accounting, audit and tax services, ALL has a niche in business valuation, and provides valuable ideas and assistance in the areas of business consulting, estates, trust and financial planning, personal financial administration and strategic growth management and consulting.
If you have questions about FBAR penalties please reach out to your ALL CPAs advisor or contact us below.
