Thursday, December 8, 2011

IRS Spells Out FBAR Rules For Dual Citizens, Details Penalty Relief for Failure to File

The Internal Revenue Service spelled out the rules for U.S. and dual citizens who want to comply with U.S. requirements to report their foreign bank accounts, noting they will not be subject to penalties in all cases where they have failed to file.

IRS said it is aware that some taxpayers who are citizens of both the United States and a foreign country are only now realizing they are required to file a Report of Foreign Bank Account (FBAR) and want to come into compliance.

In a new fact sheet (FS-2011-13) dated Dec. 7, the agency explained that taxpayers who owe no U.S. tax will not have to pay failure to file or failure to pay penalties. “In addition, no FBAR penalty applies in the case of a violation that IRS determines was due to reasonable cause,” the fact sheet said. The document provided a detailed explanation of FBAR filing requirements and the circumstances in which penalties will and will not be imposed.

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