IRS Provides Guidance on Foreign Bank Account and Reporting (FBAR) Penalties
- Steven L. Walker PLC
- Nov 5, 2015
- 1 min read
Tax professionals who advise clients on issues with FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), should become familiar with IRS Memorandum SBSE-04-0515-0025, “Interim Guidance for Report of Foreign Bank and Financial Accounts (FBAR) Penalties” (5/13/15). The guidance is significant because it provides procedures to ensure consistency and efficiency in the IRS’s administration of the FBAR compliance program. The procedures include:
A requirement that IRS examiners fully develop and adequately document their analysis of the civil FBAR willfulness penalty;
Detailed instructions on how to calculate the penalty amount for willful violations and nonwillful violations of the FBAR rules, and limitations or caps on the penalty amounts in certain cases
Coordination of cases with technical specialists who have been designated to assist examiners with their FBAR cases, and coordination of cases with the IRS Chief Counsel’s
Office in willfulness cases; and
A civil FBAR penalty case file checklist, detailing what documents must be in the administrative case file.
The new interim guidance is to be incorporated into Part 4, Chapter 26, of the Internal Revenue Manual (IRM).
