Amy Feldman has written a second article:
It features more adventures in FBAR. It also raises the issue of the (possible) relationship between FBAR compliance and becoming a U.S. citizen.
Here are some comments from another blog
This is a second interesting article on “offshore accounts” by Amy Feldman. You may recall that she did a story a year ago on this topic:
Although the facts in the article are sparse, it looks to me as though Mr. Winfield entered OVDI on his own without understanding the program. Of course, it may be better for him that he did enter on his own rather than paying a lawyer to guide him to the same result. One more example of the unbelievable damage OVDI is inflicting on a man – who clearly wanted to be “FBAR Compliant”. I would guess that the IRS just applied the 25% penalty to accounts with a maximum balance from 2003 – 2010 of 112,000.
Obviously he should consider both contacting TAS (is the first time penalty abatement available on a Title 31 FBAR issue?) and/or doing an “opt out” (reasonable cause).
Based on the facts here (although there are not a lot) he should be able to argue “reasonable cause” on an opt out. Where he needs to be careful – and where he may benefit from professional advice – would be on the “reasonable cause” letter.
This is another incredible story of how the U.S. tax and compliance culture is destroying peoples lives. Unfair or what!
Moral of the story: do NOT enter OVDP without a very compelling reason!
It’s also interesting that the article suggests that his motivation for entering OVDI was because he was applying for U.S. citizenship. It would be interesting to know what he was thinking (rightly or wrongly). To what degree is “FBAR Compliance” related to becoming a U.S. citizen? On this topic, here is a comment that was posted on another blog yesterday (perhaps motivated by this story??).
“What is also unclear is the impact of OVDI on (potential) future citizenship/green card applications for those that have been through the OVDI process. Does this count as a ‘crime’ that was committed but not detected? The legal definitions in this area are ambiguous and not being able to apply for citizenship (or chance of denial) is a tough penalty for not knowing to file FBARs.
Has anyone been in this position (applying for citizenship post OVDI) and can you talk about it? or does anyone have any information about this?”
Yes, if anybody has any experience with this, your thoughts would be helpful.
We do know that a conviction for tax issues can result in deportation (see this article from B. Mahany):
Interesting question – the relationship between citizenship applications and FBAR compliance.