San Diego Foreign Bank Accounts

San Diego Foreign Bank Account Attorneys

Receiving a notice from the IRS or FinCEN about an unreported foreign financial account can be stressful and confusing. Whether you inherited an overseas account, lived and worked abroad, or overlooked reporting requirements, you are not alone. There are established compliance pathways that can significantly reduce penalties when addressed proactively.

At Dallo Law Group, we help individuals and businesses in San Diego and throughout the country navigate the complex world of foreign bank account reporting, FBAR compliance, and offshore tax issues. Our attorneys understand both the legal framework and the human side of these cases. We know you’re not a criminal. You’re someone dealing with a confusing area of tax law that catches thousands of honest taxpayers off guard every year.

Understanding FBAR Reporting Requirements

U.S. persons, including citizens, resident aliens, and certain domestic entities such as trusts or estates, must file FinCEN Form 114 (FBAR) if they had a financial interest in or signature authority over foreign financial accounts and the aggregate value of all such accounts exceeded $10,000 at any point during the calendar year. FBAR is filed electronically through FinCEN’s BSA E‑Filing System and is not submitted with your federal income tax return.

Reportable foreign financial accounts include:

  • Bank accounts and investment or brokerage accounts held at non‑U.S. financial institutions
  • Accounts over which you have signature authority
  • Other financial accounts defined by FinCEN

Certain foreign insurance or annuity contracts with a cash value may also be reportable if they meet the definition of a financial account under FBAR rules.

Many taxpayers are surprised to learn that FBAR requirements extend beyond accounts they personally own. If you have signature authority over a foreign account, for example, as an officer of a company or as a trustee, you may be required to file even though the funds are not yours. This is one of the most common areas where otherwise diligent taxpayers find themselves out of compliance.

Specified Foreign Financial Assets and IRS Form 8938

In addition to FBAR, certain U.S. taxpayers may need to file IRS Form 8938 (Statement of Specified Foreign Financial Assets) under the Foreign Account Tax Compliance Act (FATCA). While both forms involve foreign financial information, they have different reporting thresholds, definitions, and filing methods. Form 8938 is submitted with your federal income tax return and applies only when your specified foreign financial assets exceed the applicable IRS threshold.

Form 8938 covers foreign financial accounts but also extends to other foreign assets that FBAR does not, such as:

  • Stock or securities issued by a foreign corporation
  • Financial instruments or contracts held with a foreign entity
  • Interests in foreign trusts or estates
  • Partnership interests in foreign partnerships

Form 8938 thresholds depend on filing status and residency. For U.S. residents, the threshold generally starts at $50,000 of specified foreign financial assets on the last day of the tax year or $75,000 at any time during the year (higher if married filing jointly). For U.S. taxpayers living abroad, the thresholds are substantially higher ($200,000/$300,000 for singles and joint filers, respectively). These thresholds are set by the IRS and determine whether filing Form 8938 is required. Getting these details right matters because errors or omissions on either form can trigger serious consequences.

The Penalties Are Real — But They’re Not Inevitable

Congress and the US government take offshore tax compliance seriously. The penalties for FBAR violations can be staggering:

FBAR penalties can be significant. Non-willful violations may result in civil penalties exceeding $10,000 per violation (adjusted annually for inflation). Willful violations may trigger penalties equal to 50% of the account balance or other amounts under current regulations, and can include criminal fines and imprisonment. Failure to file Form 8938 may result in an initial $10,000 penalty, with additional penalties for continued non-compliance.

These numbers are alarming, and they’re meant to be. What matters most, however, is that the Internal Revenue Service distinguishes between taxpayers who deliberately evade reporting requirements and those who made good-faith errors or were simply unaware of the rules. The right path forward depends on which category applies to you and on how promptly and proactively you take steps to come into compliance. 

Voluntary Disclosure and Coming Into Compliance

If you have unreported foreign bank accounts or foreign income, the worst thing you can do is nothing. The IRS has several programs and procedures designed to help taxpayers come into compliance, and in many cases, the penalties can be significantly reduced when you come forward voluntarily rather than waiting for the IRS to find you.

Streamlined Filing Compliance Procedures 

The IRS offers programs to help taxpayers come into compliance voluntarily. The Streamlined Filing Compliance Procedures provide eligible taxpayers with non-willful reporting failures a path to file delinquent FBARs and amended returns with reduced or no penalties, subject to IRS eligibility requirements. Taxpayers concerned about willful conduct or potential criminal exposure may qualify for Voluntary Disclosure Programs, which require full cooperation and disclosure.

Delinquent FBAR Submission Procedures 

Taxpayers who have no unreported foreign income but failed to file FBARs may qualify to submit delinquent forms without penalty through a separate IRS procedure, provided they are not already under audit or investigation.

Choosing the right approach requires careful analysis of your specific facts. The wrong choice can increase your exposure rather than reduce it, which is why working with an experienced international tax attorney before taking action is critical.

How Our Approach Protects You

When you come to Dallo Law Group with a foreign bank account issue, we start by understanding your complete picture. We review your foreign financial accounts, your tax filing history, and the circumstances behind any reporting gaps. From there, we develop a strategy tailored to your situation, not a one-size-fits-all response.

Our process typically involves:

  • Evaluating all foreign bank accounts and foreign assets to determine full reporting obligations.
  • Analyzing whether non-compliance was willful or non-willful under current IRS standards.
  • Identifying the most favorable compliance pathway available to you.
  • Preparing and filing all necessary forms, including amended returns, delinquent FBARs, and any required disclosures.
  • Communicating directly with the IRS, FinCEN, and other relevant agencies on your behalf throughout the process.
  • Working to minimize penalties and eliminate criminal exposure wherever possible.

We also coordinate with CPAs and other tax professionals when needed to ensure every aspect of your international tax situation is addressed: from foreign income reporting to FBAR compliance to any related state tax obligations.

Take the First Step Toward Resolution

Foreign bank account issues don’t resolve themselves, and the penalties grow with each passing tax year. But your decision to research this now says something important: you’re trying to do the right thing. That proactive mindset places you in a much stronger position than you may realize, especially in the eyes of the Internal Revenue Service when you take timely steps to come into compliance.

Contact Dallo Law Group at (619) 795-8000 for a confidential review of your foreign account reporting obligations. Our team will explain your options clearly and guide you through compliance strategies tailored to your situation. Every conversation with us is privileged.