WHAT SHOULD YOU DO? YOU FAILED TO FILE AN FBAR BUT REPORTED ALL INCOME FROM AN OFFSHORE ACCOUNT

This is a very common situation. I have never heard of someone who didn’t about the FBAR to have filed the FBAR. (Unless it was some kind of accidental form filing).

The Tax Wars Blog

This predicament is not an uncommon occurrence.  Many taxpayers may have had a foreign bank or brokerage account and reported the income in their tax returns or earned no income but did not know they had to file an FBAR.  They are often panic-stricken over what they have heard are horrific consequences.  But, there is now light at the end of the tunnel thanks to a new IRS procedure aimed at these taxpayers.

Should these taxpayers with delinquent FBARS enter the OVDP?

Absolutely not.  The Offshore Voluntary Disclosure Program or OVDP is for tax criminals or those who fear imposition of a draconian civil FBAR penalty.  The OVDP is not for those who’ve reported all income from an offshore account but failed to file an FBAR or other foreign information return.

Should they elect the new Streamlined Compliance Procedures?

No, they should not.  The Streamlined Procedures (which are really two processes one for expats…

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