The maximum statutory penalty for a willful FBAR violation includes both significant criminal fines and potential imprisonment.
A willful FBAR violation occurs when an individual, knowing of their obligation to file a Report of Foreign Bank and Financial Accounts (FBAR), intentionally fails to do so. This serious offense falls under the purview of federal law.
Understanding Willful FBAR Violations
The obligation to file an FBAR arises when a U.S. person has a financial interest in or signature authority over foreign financial accounts with an aggregate value exceeding $10,000 at any point during a calendar year. While non-willful violations also carry penalties, willful violations are treated much more severely under the law due to the element of intent.
The law governing these penalties is primarily 31 U.S.C. 5322, which addresses criminal penalties for Bank Secrecy Act (BSA) violations, including FBAR non-compliance. A willful violation implies that the individual was aware of their duty to file the FBAR and deliberately chose not to comply.
Maximum Statutory Penalties Detailed
For willfully failing to file an FBAR, the statutory penalties are substantial and can include both hefty monetary fines and a lengthy prison sentence.
Here's a breakdown of the maximum statutory penalties:
| Penalty Type | Maximum Amount/Term | Legal Basis |
|---|---|---|
| Criminal Penalties | Up to $500,000 | 31 U.S.C. 5322 |
| Imprisonment | Up to 10 years | 31 U.S.C. 5322 |
These penalties highlight the serious nature of willful FBAR non-compliance, demonstrating the government's commitment to enforcing international tax and financial reporting laws. The penalties are designed to deter individuals from concealing foreign financial accounts or income.
For more information on FBAR filing requirements and general guidance, you can refer to official resources from the Internal Revenue Service (IRS).
