Archives     Advertise     Editorial Calendar     Subscribe     Contact Us    

Don't fear the FBAR


Report Your Offshore Accounts

If you are a taxpayer with offshore financial accounts, you could be in trouble with the IRS and not even know it.

The Bank Secrecy Act was passed in 1970 to fight overseas money laundering. It requires that certain financial accounts based in foreign countries be reported to the IRS through a document called the Foreign Bank Account Report (FBAR) if these accounts have a total value exceeding $10,000 at any time during a calendar year (not the average balance for the year). This includes money in any savings or checking accounts in a foreign financial institution, as well as equity accounts such as mutual funds.

While the law is certainly well-intentioned, it unfortunately snares innocent foreigners like physicians who legitimately made their money outside the U.S. Unlike the United States, most countries do not tax the income their citizens make beyond their borders so it might not occur to new American citizens, resident aliens ... or even their accountants ... that they have to report these assets to the IRS. (Few CPAs delve into foreign tax issues, but being an immigrant myself from South Africa and having numerous foreign clients, it behooves me to stay abreast of the latest regulations.)

Unfortunately, ignorance of the law probably won't prevent the IRS from imposing stiff penalties for not filing a FBAR. A willful failure to file could carry criminal prosecution, as well as criminal or civil penalties.

So what can taxpayers with foreign accounts do to avoid potential penalties? First, come clean. You can run but you can't hide -- banks readily share information with each other so it's fairly certain the IRS will discover any undisclosed foreign accounts.

If you willfully failed to report foreign accounts in the past but the IRS has yet to discover it, you could still avoid the stiffest penalties and prosecution by participating in the Offshore Voluntary Disclosure Program (OVDP), which is specifically designed to provide protection from criminal liability and terms for resolving your civil tax and penalty obligations.

In recent years, the U.S. expanded the OVDP to include the Streamlined Filing Compliance Procedures (known as the Streamlined Program) for non-willful foreign account holders. Penalties could be as little as 5 percent of the maximum undisclosed amount.

Although the Bank Secrecy Act might seem to unfairly target foreign doctors and other professionals, it is nevertheless routinely enforced. Find an advisor who understands this specific area of the tax code to ensure that the FBAR and other paperwork are filed in a timely manner.

Report offshore financial accounts before the IRS finds out about them. Otherwise, you could be out of good options.

Larry Sacks, CPA, is a principal at Snow Creek Wealth Management in Nashville, which helps clients build, preserve and manage wealth through financial planning, accounting and investment management. For more information, email or go online to


Snow Creek Wealth Management

IRS Information on FBAR


Related Articles:

Recent Articles

ACEP Board To Consider Further Legal Recourse During May Meeting

The federal government last week published a notice of clarification in response to a court order requiring it to adequately address comments and proposals made by the American College of Emergency Physicians (ACEP) and other organizations regarding the Greatest of Three Rule.

Read More

National Nurses Week: Lipscomb Prepares Next Generation of Servant Nurses

Every day nurses play a significant role in the nation's healthcare, and this week the nation is celebrating the profession as part of the American Nurses Association annual National Nurses Week celebration.

Read More

Healing Mind & Body

Experts say screenings, education, early intervention key to improving, maintaining mental health.

Read More

Searching for Sustainable Solutions to the Physician Shortage

AAMC calls for a multi-pronged approach to address the looming physician shortage.

Read More

Statement On Opioid Related Legislation

America's hospitals and health systems have been engaged in treating people with substance use disorders for decades. In recent years, we have seen first-hand the devastating effects of the opioid epidemic on patients, families, and communities across the country.

Read More

New Legislation Addressing the Opioid Crisis

As the latest session of the Tennessee Legislature drew to a close, new laws were passed impacting the prescribing of opioids, particularly in regards to 'opioid naïve' patients.

Read More

ACHEMT Hosts Opioid Educational Event

Middle Tennessee healthcare execs recently gathered to discuss the state's opioid crisis.

Read More

Cumberland Heights Breaks Ground on ARCH Academy

Cumberland Heights has broken ground on a new residential facility specifically for adolescent boys struggling with addiction.

Read More

The New Normal in Nursing Education

More nursing programs, opportunities are available for working adults, and healthcare organizations are taking note.

Read More

Neurology Notes

Progress is being made to address the wide array of neurological disorders that impact nearly one-third of Americans.

Read More

Email Print



Bank Secrecy Act, FBAR, Foreign Bank and Financial Accounts, Larry Sacks, Offshore Accounts, Offshore Voluntary Disclosure Program, OVDP, Snow Creek Wealth Management
Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: