Are you a U.S. citizen living overseas with a foreign bank account? If your accounts hold more than $10,000 in the aggregate anytime during the year, you are required to file an FBAR (Report of Foreign Bank Accounts) by June 30th of the following year. It doesn’t matter whether foreign accounts generate income or not; just owning them, or having signature authority, requires you to file. Failure to file can result in severe civil penalties and potential prosecution followed by a term in federal prison.
In addition many U.S. citizens living abroad have failed to file U.S. federal income tax returns. There may be hope even if you haven’t filed, though. There is a new compliance offer by the IRS that gives those who qualify a chance to avoid all penalties for not filing the FBAR and not filing U.S. income tax returns. To qualify, the taxpayer must present a low level of compliance risk. They must file delinquent income tax returns for the past three years and file delinquent FBARS for the past six years. The tax returns must have less than $1,500 in tax due in each year being filed. If you qualify, this deal is a no-brainer.