# FBAR / Foreign interest income



## tigerp (Apr 26, 2016)

Hi, I have filed US taxes every year since 2004 but foreign interest income got missed out in my return. Interest is only foreign income nothing else. Principal amount was transferred from US only. Also FBAR were not filed. Last year, I had interest income of around $15K. 

Since I am aware of this ..I am ready to clean this up by paying taxes etc. While doing research I see 2 options:

1. Streamline program – 3 years amendment and 5% penalty on max balance

2. File 1040 amendment (quiet disclosures) 

Streamline program looks good to me but 5% penalty is deal breaker as big amount was transferred 3 years back to make a flat purchase but it did not happen. Beyond 5 years..there was not much balance in my account. Hence I am inclined towards quiet disclosure but want to understand risks associated with it. Talking with CPA / Attorney did not help much ..all they do to scare you further to milk the cow so want to know from this forum. If u were in similar situation .what u did and experience with it.

if I decide to go with QD, amendment last 1 year is enough as there is still time left for FBAR (june 30) or I should amend for last 3 years. Please let me know your thoughts.


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## BBCWatcher (Dec 28, 2012)

Ordinary late/amended filing in this case carries with it a theoretical risk that you would be assessed penalties for failure to file timely and accurate FinCEN Form 114s. Consider the risk of being assessed those penalties in your decision. We have not heard reports of the U.S. Treasury Department assessing penalties for voluntary, unprompted late filing of FinCEN Form 114s assuming you have a valid, truthful excuse and the oversight was non-willful.

There is no statute of limitations on the unreported interest income, so you'd have to file amended tax returns for every year starting from 2004 to get that problem fully corrected if you're not participating in the Streamlined Program. The IRS will then assess interest and penalties accordingly. Interest is generally 3% per year, and penalties are no higher than 25% but often lower. (At least your more recent unreported income will have lower penalties.) Again, assuming the oversight was non-willful and inadvertent, and that you're correcting the oversight in reasonably timely fashion. For FinCEN Form 114 there is a six year statute of limitations, so you would have to file that form for 2015 (due on June 30, 2016), 2014, 2013, 2012, 2011, 2010, and 2009.


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