$10,000 to start
Forms 5471, 5472 and 8938 each carry a $10,000 penalty per form per year, with continuation penalties on top once the IRS issues notice.
Tax service
International tax compliance
International information returns carry penalties that begin at $10,000 per form, per year, and apply whether or not any tax was owed. Most exposure we see comes from people who had no idea they had a filing obligation.
The problem
The penalties are the point
These are information returns. The penalty is for not filing, not for owing.
Obligations you never chose
A foreign parent, a signature on an overseas account you do not own, or a modest inherited interest abroad can each create a full US filing obligation.
The statute may never close
Where a required international information return is not filed, the assessment period for the entire return can stay open indefinitely, not just for the foreign item.
What we do
Forms and positions we handle
For businesses with foreign ownership or operations, and for individuals with assets or income abroad.
- FBAR: FinCEN Form 114Required where aggregate foreign account balances exceed $10,000 at any point in the year, including accounts you merely have signature authority over.
- Form 8938: FATCA reportingSpecified foreign financial assets reported on the return itself, with thresholds that differ from FBAR and are frequently confused with them.
- Form 5471: foreign corporationsCategory-by-category filing analysis for US persons with interests in foreign corporations, including Subpart F income and GILTI computation.
- Form 5472: foreign-owned US entitiesReportable transactions for US corporations with 25% foreign ownership, and for foreign-owned single-member LLCs that otherwise file nothing at all.
- Forms 8865 and 8858Foreign partnerships and foreign disregarded entities, including the branch reporting that catches out US owners of overseas operating structures.
- Treaty positions and foreign tax creditsForm 1116 and Form 1118 credit computations, treaty-based return positions on Form 8833, and residency tie-breaker analysis.
- Delinquent filing remediationStreamlined filing compliance procedures and delinquent information return submissions where the failure was genuinely non-willful.
How it works
A process you can follow
Four stages, with a defined deliverable at each one. You always know where the work stands.
1
Scope
A structured interview covering accounts, entities, signature authority, inheritances and foreign income, the areas people do not think to mention.
2
Determine
Which forms are required, for which years, and whether prior years are exposed.
3
Remediate
Where prior years were missed, the appropriate correction program selected and the reasonable-cause narrative drafted.
4
File & maintain
Current-year forms filed with the return and on the FinCEN system, then a standing checklist so nothing lapses.
Who it's for
Who has an obligation
Far more people than realize it. Any of the following is enough to trigger at least one filing.
Foreign bank or brokerage accounts US company with a foreign parent Foreign-owned single-member LLCs Shareholders in a foreign corporation US persons living abroad Inherited foreign assets Foreign pensions and life policies
Deliverables
What you get
- A written determination of every form required, and for which years
- All international information returns prepared and filed with the return
- FBARs filed through the FinCEN BSA system with confirmation retained
- GILTI and Subpart F inclusions computed and documented
- A remediation plan with reasonable-cause support where prior years were missed
$10k
Minimum penalty per unfiled form, per year
$10k
FBAR filing threshold, aggregate across accounts
15 Apr
FBAR due date, with automatic extension to 15 October
Questions
Frequently asked
Yes. FBAR reporting is triggered by a financial interest in or signature authority over foreign accounts, once the aggregate maximum balance exceeds $10,000 at any point in the year. Officers with signing authority over an employer's overseas accounts are frequently caught by this and are frequently unaware of it.
It is an IRS program for taxpayers whose failure to file was non-willful: genuine ignorance rather than concealment. It generally requires three years of amended returns, six years of FBARs, and a signed certification of non-willfulness. For those who qualify, penalties are substantially reduced or eliminated. The certification is made under penalty of perjury, so the non-willfulness analysis has to be honest.
Yes, and this catches out a great many people. Since 2017, a foreign-owned US single-member LLC is treated as a corporation for reporting purposes and must obtain an EIN, file a pro-forma Form 1120 and attach Form 5472 disclosing reportable transactions with its owner. Even formation costs paid by the owner count as reportable transactions. The penalty for not filing is $25,000.
No, though the overlap is confusing and both are frequently required. FBAR is filed with FinCEN, not the IRS, covers foreign financial accounts, and has a $10,000 aggregate threshold. Form 8938 is filed with your tax return, covers a broader class of specified foreign financial assets, and has thresholds that vary by filing status and whether you live in the US. Filing one does not satisfy the other.
Related
Often paired with
Individual & Owner Returns
Personal 1040s that reconcile cleanly to your K-1.
Learn moreBusiness Tax Returns
Forms 1120, 1120-S and 1065 filed accurately and on time.
Learn moreNotices, Penalties & Resolution
Decode the notice, abate the penalty, close the file.
Learn more