While FBAR reporting rules are frequently misunderstood, US persons have several options to correct mistakes, before the government learns of the non-compliance.

June 30th is the annual deadline for filing a Foreign Bank Account Report (FBAR) for the preceding calendar year. Recent Internal Revenue Service (IRS) and Department of Justice (DOJ) enforcement actions have brought to light long-running and widespread non-compliance — from the intentional to the merely mistaken — by those required to file FBARs. These include US persons and entities with a financial interest in or control over a variety of foreign accounts. This Client Alert addresses the most common misconceptions about the obligation to file, what information must be reported and the surprisingly broad categories of persons who must file an FBAR. The penalties for non-compliance can be severe. However, US accountholders have several options for voluntarily correcting FBAR reporting errors and omissions. Eligibility for the various alternatives and the severity of the potential sanctions are significantly dependent upon the FBAR filer’s knowledge and state of mind vis-à-vis the reporting requirements at the time of the error or omission. Navigating these options frequently requires the assistance of US counsel.