April 30, 2011. Sacre Bleu! The Foreign-Account Penalty (Wall Street Journal). Tax season may be over, but FBAR season is here. That ugly, universally used acronym stands for “Foreign Bank Account Report.” It refers to an odd but crucial June filing for U.S. taxpayers with one or more “foreign financial” accounts, which can include not only bank accounts but overseas life-insurance policies and nonbank accounts. Nonfilers ignore this form at their peril. “It can be more dangerous not to file an FBAR than not to file a tax return,” says Andy Mattson, an accountant with Mohler, Nixon & Williams in Campbell, Calif. It’s purely an information return, but FBAR penalties are among the most severe in the tax system: $100,000, or half the value of the account, per year, for willful failure to file. The FBAR is one element of a concerted push by Congress and the Internal Revenue Service to make sure U.S. taxpayers are paying what they owe on foreign accounts. Unlike other countries, Uncle Sam taxes citizens and residents on world-wide income…
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