Each of the reporting failures delineated above (a, b, c & d), if willful, could be the basis for tax felony prosecutions in the U.S. which, under U.S. criminal sentencing guidelines, would likely result in incarceration. Similarly, and irrespective of the criminal consequences, each of these reporting failures could also result in the assessment of significant, and potentially confiscatory, civil money penalties. The exposure to criminal prosecution could be avoided and the civil penalties could potentially be mitigated (lessoned) by making a voluntary disclosure as opposed to waiting around to be detected and subsequently prosecuted by the IRS.
Taxpayers with undisclosed foreign accounts or entities should make a voluntary disclosure because it enables them to become compliant and generally eliminate the risk of criminal prosecution. Taxpayers who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution. When a taxpayer truthfully, timely, and completely complies with all provisions of the voluntary disclosure practice, the IRS will generally not recommend criminal prosecution to the Department of Justice even where the foreign account was funded from income skimmed off a business and previously was unreported according to one IRS spokesperson.
Contact my office to schedule a reduced rate initial consultation to discuss your FBAR and voluntary disclosure concerns and how I can be of assistance. When you call, you will speak directly to me, not a paralegal or assistant, to get the experienced answers you need.