The true value and purpose of an FBAR

Came across this comment:

Anonymous said…
“The data on a FBAR is utterly useless to any sensible law enforcement official and/or any known regulatory agency. In contrast, the ABSENCE of a FBAR or better yet: a demonstrably willful failure to file it – is of enormous potential value to the US Treasury because it allows the opportunity to extort wealth from and/or otherwise coerce its citizens.”

This comment neatly sums up FBAR in a nutshell. The only FBAR form of value is the one that is not filed.

I’d go further, and suggest that filed FBARS are actually worse than useless because there is a cost to processing them. The cost drain of this pointless busywork is likely to worsen considerably in future as the IRS begins to pull in hundreds of thousands of new ordinary 1040 returns from overseas, all of which have a big fat zero dollars owing on the bottom of them because of the FEIE and/or tax treaties.

There are plans to mandate electronic only FBARs from next year. I predict something similar soon for *all* US tax returns filed by overseas filers, and perhaps domestic also, as the IRS struggles to contain ballooning processing costs, with little to no additional revenue, caused by their recent jihads.”

The FBAR has created a new class of historian called the FBAR Historian.

 

 

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One thought on “The true value and purpose of an FBAR

  1. Petros

    I think this is not quite true as it stands now. A belated FBAR filed with “reasonable cause” is worth something, potentially, if the IRS decides to define reasonable cause narrowly rather than broadly. Is reasonable cause, for example, “I was unaware of the filing requirements”?–or is it, “I was in a 6-year comma and as soon as I awoke from it I promptly filed my FBARS”? If reasonable cause is defined narrowly, then the filed FBAR is far more than the FBAR left unfiled, as it now gives the IRS the information they need to fine you. Of course, once FATCA is implemented, your bank will be filing that information on your behalf, and you can kiss your money good bye.

    Reply

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