FIFA Charges Showcase FBAR Penalties, Turbocharging Prison Time

670px-cela1FIFA has big problems, and not just limited to foreign bank account reporting. Yet many average Americans should watch at least one aspect of the FIFA criminal charges play out: the foreign account forms known as FBARs. Each U.S. citizen and permanent resident must report worldwide income to the IRS, even when paying taxes elsewhere. Moreover, you must file an annual FBAR (now called FinCEN Form 114) disclosing your foreign bank accounts if their aggregate value exceeds $10,000 at any time during the year. The penalties for either failure are big, potentially criminal.

FBAR penalties are even worse than tax evasion. An FBAR violation that is non-willful is $10,000 per account per year. Willful—but still civil—violations can be up to 50% of the value in a foreign account, again, per year. An FBAR violation that is criminal is even worse, carrying up to 10 years in prison. You have to file FBARs even if you are only a signatory but not a beneficial owner.

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