Source: https://www.goldinglawyers.com/fbar-basics-what-is-an-fbar-fincen-114-report-of-foreign-bank-and-financial-accounts/
Timestamp: 2019-04-20 04:14:55+00:00

Document:
5 What Are FBAR Penalties?
6 What is the Legal Standard for Willful and Non-Willful?
7 Why Are FBAR Penalties So High?
9 Can I be Criminally Prosecuted for FBAR?
10 What Tax Crimes Can I be Convicted of?
11.1 Is it more than $10,000 per account, or in Total?
11.2 What if the Money is not mine?
11.3 Who or What is a U.S. Taxpayer?
11.4 I Live Overseas, Does that Matter?
11.6 I did Not have to File a Tax Return?
11.7 The Money in the Foreign Accounts is not Mine?
11.15 What Types of Accounts must be Reported on an FBAR?
11.16 Do I have to report my Life Insurance Policy?
11.18 I do not know my Maximum Account Value?
11.19 Can If I file a Late FBAR Statement?
11.23 Is the FBAR the same as an 8938 form?
As with everything in life, sometimes it is important to go back to the basics — even complicated FBARs.
When it comes to offshore disclosure and foreign account reporting, the basics normally refers to understanding what an FBAR (FinCEN 114) – Report Of Foreign Bank And Financial Account is, and what the penalties are for failing to report the accounts.
Since for most clients, the biggest questions and concerns they have is regarding FBAR Penalties — we will provide you a summary of FBAR Penalties, followed by our FBAR FAQs.
What Tax Crimes Can I be Convicted of?
As provided by the IRS, Possible criminal charges related to tax matters include tax evasion (IRC § 7201), filing a false return (IRC § 7206(1)) and failure to file an income tax return (IRC § 7203). Willfully failing to file an FBAR and willfully filing a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322. Additional possible criminal charges include conspiracy to defraud the government with respect to claims (18 U.S.C. § 286) and conspiracy to commit offense or to defraud the United States (18 U.S.C. § 371).
What if the Money is not mine?
Even if the money is not yours, but you have signature authority over the foreign account – you are required to report the account on the FBAR. This also includes accounts in which you are a joint account holder but the money is not yours – it still must be reported.
This question can get more and more complex depending on who you speak to and what the context of the question is. To that end, if you are either a U.S. citizen, Legal Permanent Resident, or Foreign National Subject to US tax such as a visa holder (if you meet the Substantial Presence Test), then you should most likely file the annual FBAR form.
*If you are unsure whether you should file the form or not, you should speak with an experienced International Tax Lawyer to evaluate your particular situation.
I Live Overseas, Does that Matter?
Unlike a FATCA Form 8938 — which is similar to the FBAR — the requirements for filing the FBAR do not change solely because you live overseas. In other words, if you still meet the requirements for having to file a tax return (even if you do not have to file a tax return because you did not meet the minimum threshold requirements for earning income sufficient to file a tax return) you still have to file the FBAR – no matter where you live.
Unfortunately, just because you relinquished your green card does not mean you are exempt from filing an FBAR. If you are considered a long-term resident of the United States and/or meet the substantial presence test you may still be responsible for filing an annual FBAR statement.
*You should speak with an experienced FBAR lawyer to discuss this in more detail.
This can also get confusing, but it is important to remember that the FBAR is not filed with your tax return. Rather, while your tax return is filed directly with the Internal Revenue Service (by mail or online), your FBAR is filed online electronically directly with the Department of Treasury. Even if you do not meet the threshold requirements for filing a tax return, if your annual foreign account balances exceed $10,000, you should still file the FBAR.
This is not unusual. It is very common in foreign countries to have children or other individuals with a Power of Attorney over another person’s account – even when the money does not belong to the POA holder. To that end, if a person’s name is on the account, they should still file an FBAR statement. There is a section of the FBAR reserved for individuals who have signatory authority or other type of authority on the account, but the money is not theirs.
It is important to remember that the FBAR is a reporting form. In other words, the Department of Treasury wants to know whether you have the money overseas — so that the DOT can track it. The source of the money is less important to the degree that the Department of Treasury does not really care whether you received it from an inheritance, whether you earned it overseas, or whether you have full access to that money at the current time – for FBAR purposes at least. Rather, they just want to know where the money is being held in whose name is associated with the account.
**That does not mean you should file a late FBAR without entering one of the approved programs (please see below).
This is where the FBAR starts to get more complicated. The most important thing to remember is the concept of the FBAR is to promote financial transparency. Therefore, it does not really matter how you structure the business, if in the end the money is yours, then you should file the FBAR.
We get it. You opened the company offshore using other people’s names. In other words, even though your name is not directly on the corporate documents or other documents required to form the business in the foreign jurisdiction of choice…the money is yours.
This is the type of situation in which you should speak with an experienced FBAR lawyer before taking any action. Why? Because while technically the money is not yours to the degree that your name is not on the company, if the IRS or US government was to pierce the corporate veil and learn of your ownership (whether in fact or implied) you may be looking at tax evasion and tax fraud charges.
If you are the “true owner” of the money, then filing the FBAR is technically required.
As you can imagine, foreign trusts are not immune from having to file an FBAR statement either – in addition to possibly having to file a 3520 and 3520A. Whether the purpose of the foreign trust was “harmless,” and/or you thought you could avoid U.S. detection or possibly to form the foreign credit shelter trust or foreign asset protection, a foreign trust does will not negate your requirement to file an FBAR. If the accounts are in a foreign trust, in which you are the owner of the foreign trust then you have to report the account on the FBAR.
Essentially, any account that is maintained at a foreign financial institution must be reported on the FBAR – but this does not mean every income generating asset has to be included. Here’s an example: if you have a Foreign Bank Account at a Foreign Financial Institution it has to be reported on the FBAR. Conversely, if you have a foreign rental property that is earning foreign rental income, while the foreign rental income must be reported on your tax return, and the account in which the income that is generated is placed into must be reported (assuming you otherwise meet the FBAR filing requirements) — the home itself does need not be reported on the FBAR.
This is another complex area of the FBAR. Essentially, if the life insurance policy (or life assurance policy as it is called in many countries) has a surrender value or sale value insofar as you could sell the policy on the open market – it should most likely be reported on the FBAR.
This is a question we receive often, and so a distinction must be made. Just because you are reporting a foreign account on an FBAR does not mean there is a taxable event taking place. For example, the money may have been inherited, received as a gift and/or earned with income tax already having been paid on the earnings.
When you are reporting on the FBAR, you are supposed to provide the maximum value of the account balance for the year. Depending on which country you are in, and whether the account provides you statements (or if it is a passbook account) that information may not be readily available. When that information is not available, you may either click the box that reads maximum account balance unknown or you may also consider using the balance that you have available, and explaining why you cannot obtain the maximum value in the box provided on the first page of the FBAR.
This is a very complex issue. Technically, you are not allowed to file a late FBAR statement. There is some exception for direct filings in situation where there is no unreported income. Other people submit a Quiet Disclosure (in which they secretly file prior FBARs and amended tax returns) which can result in extremely high fines and penalties.
Two things to keep in mind his first, the IRS is not very sympathetic, and second, if the IRS disagrees with your reasoning — you have now disclosed all of your account information to the IRS with no protection from penalties or criminal investigation.
For more information about Reasonable Cause, please Click Here for a summary provided by Golding & Golding.
Under the streamlined program, a person will amend their tax returns for three (3) years as well as file six (6) years of unreported past FBAR statements (assuming that they are a U.S. taxpayer for six years; if they have only been a US taxpayer for four (4) years they would only file four (4) years of past FBAR statements). This program is reserved for taxpayers who were non-willful (in other words, they were unaware of the requirement to file FBAR and report their foreign income).
For more information about the Streamlined Program, please Click Here for a summary provided by Golding & Golding.
OVDP is the Offshore Voluntary Disclosure Program. It is a program designed for individuals, businesses and trusts that knowingly intentionally failed to report their foreign account information and foreign income earnings. The program requires the applicant to file eight (8) years of past FBAR statements along with eight years of original and/or amended tax returns.
For more information about OVDP, please click here for a summary provided by Golding & Golding.

References: § 7201
 § 7206
 § 7203
 § 5322
 § 286
 § 371