Avoiding Civil Penalties for Failure to Make a Maryland Offshore Voluntary DisclosureNews, Offshore Account Update
Posted in on July 31, 2019
Offshore account holders who are also U.S. taxpayers have many reporting requirements for those accounts. These offshore accountholders also face significant civil penalties for failing to make these disclosures. If these taxpayers do not avail themselves of the IRS offshore voluntary disclosure programs, they could be in severe financial trouble.
Thankfully, a Maryland offshore voluntary disclosure attorney can help a taxpayer avoid these penalties. With the guidance of Maryland tax attorney Kevin E. Thorn who has experience in offshore voluntary disclosures, the taxpayer can bring themselves into tax reporting compliance.
What are the Penalties for Failing to Report Offshore Accounts?
There are numerous potential forms to be filed for offshore accounts. In addition, there are numerous associated penalties, including the following:
- FBAR: The Foreign Bank Account Report (FBAR) is the commonly used term for FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. It must be filed with the Financial Crimes Enforcement Network (FinCEN), which is a bureau in the U.S. Treasury Department. An offshore account holder who fails to file an FBAR could face a penalty of thousands of dollars for non-willful violations, and even greater penalties for willful violations.
- Form 8938: U.S. taxpayers with certain foreign assets valued above specified thresholds may need to file FinCEN Form 8938, the Statement of Specified Foreign Financial Assets. The penalties for failure to file this report are substantial and cumulative on a month-to-month basis.
- Other Forms: Other required forms deal with a huge variety of offshore account and income activity. These relate to such matters as foreign trusts, foreign partnerships, and taxpayers who are officers or directors in foreign corporations. Large penalties await any taxpayer failing to file these forms.
- Penalties for Underpayment or Fraud: If the taxpayer is found to have committed fraud, an underpayment penalty of 75 percent of the unpaid tax may be imposed.
This myriad of tax penalties can be avoided if the taxpayer uses the offshore voluntary programs provided by the IRS. However, this should not be done without the guidance of a lawyer who knows the penalties of Maryland offshore voluntary disclosure.
How can an Attorney help with Maryland Offshore Voluntary Disclosure?
If an offshore account holder has not been reporting these accounts, they may be able to avoid liability through the 2018 IRS Voluntary Disclosure program. This program allows taxpayers to report their foreign accounts and avoid or reduce some civil penalties. However, there are many potential pitfalls in this process.
A tax attorney well-versed in offshore disclosures can navigate the complex offshore disclosure process for the taxpayer. If this attorney correctly advises the taxpayer and understands the potential tradeoffs, the offshore account holder will be in a much better situation.
The Maryland Offshore Voluntary Disclosure Attorneys at the Thorn Law Group Are Here to Serve You
If you are a Maryland taxpayer who is not in reporting compliance on your offshore accounts, you should consult a Maryland offshore voluntary disclosure attorney at the Thorn Law Group. To schedule a confidential consultation, contact Kevin E. Thorn, Managing Partner, at 240-235-5096.Share This Post