FBAR Penalty Statutes of Limitations

What are the FBAR statute of limitations for penalty assessments?  What other FBAR statutes should I be concerned about?  If you have failed to file your FBAR, also known as FinCEN Form 114, you may be asking yourself these questions.  The article below will examine and discuss a few of the related FBAR statutes of limitations.

31 U.S.C. 5321(b)(1) and 5321(b)(2) provide the FBAR penalty assessment statute expiration date and collection statute expiration date, which is part of the Bank Secrecy Act.  The FBAR assessment statute expiration date is six (6) years from the due date of the FBAR, and this applies whether the failure to file the FBAR was willful or non-willful.  It is very important to note that you can also be assessed a penalty for failing to maintain required records.  The FBAR penalty statute of limitation for failing to maintain required records, whether willful or non-willful is also six years, but this statute only begins to run from the date the Internal Revenue Service first requests the records.

That being said, let’s apply these FBAR statute of limitations to an example.  Let’s assume Joe has foreign bank accounts in calendar year 2014 that exceed $10,000, and that for purposes of the FBAR filing, Joe is a U.S. Person.  Joe would thus have been required to file the FBAR (Report of Foreign Bank and Financial Accounts) on June 30, 2015.  Oooops, Joe was unaware of the FBAR filing requirement and did not file FinCEN Form 114.  The FBAR penalty assessment statute of limitations for failing to file the FBAR would expire June 30, 2021.

Now lets apply the FBAR statute of limitations for failing to maintain required records.  We will assume the same facts as above, but Joe also failed to maintain required records.  On April 1, 2016 and IRS or other examiner requested the applicable records to Joe’s foreign bank accounts.  The FBAR assessment statute of limitations for failing to maintain required records would expire on April 1, 2022.

Now that we have determined Joe’s FBAR statute of limitations for assessing a FBAR penalty, does the government have a statute of limitations to file suit?  Yes, there is a two (2) year statute for the government to file a civil action against Joe to recover an FBAR penalty.  However, there is no statute of limitations for the time period in which the government can receive payment from Joe by offsetting certain payments.

The above article has been prepared to provide information relating to FBAR statutes of limitation, but please remember to always discuss your specific facts and circumstances directly with your tax attorney or other counsel.  If you wish to speak with a tax attorney at The McGuire Law Firm, please feel free to contact us at any time.

Denver Tax Lawyer

Limited Liability Companies in Colorado

A limited liability company (LLC) is a popular choice of entity for many business owners in Colorado.  Further, many business owners in Colorado will form other forms of partnerships whether they actually mean to or not.  When forming the actual entity though many business owners are unaware of the statutory requirements to form the business in Colorado.  The article below has been prepared by a business attorney to provide information regarding the necessary requirements, but please remember to always consult directly with your business attorney.

In Colorado, a limited liability company is formed by filing articles of organization with the Colorado Secretary of State.  The articles of organization must provide the following:

  • The LLCs name and principal office address:
  • The name and address of the registered agent;
  • The true name and mailing address of the persons that are forming the LLC;
  • Whether the LLC is a member managed or member managed LLC; and,
  • That there is at least one (1) member of the LLC.

 

Section 7-80-204(1)(h) of the Colorado Revised Statutes also permit but does not require the article to disclose any other matter related to the LLC or the articles of organization that the persons forming the business determine to include in the articles.

Other Partnerships

A simple handshake can for a general partnership in Colorado, and no filing with the Colorado Secretary of State is necessary.  Section 7-64-202(1) of the Colorado Revised Statutes states, “the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.  Thus, you can form a partnership and expose yourself to liability without even intending to do so!

Limited partnerships, however, require the filing of a certificate with the Colorado Secretary of State.  All of the general partners must approve the filing of certificate of limited partnership.  A limited partnership will be governed by CULPA or CUPL, but limited partnerships formed on or before August 10, 2016 that does not elect to be governed by CUPA will be governed by CUPL for issues not covered by CULPA.  The information required on the limited partnership certificate is:

  • The name of the limited partnership, and the initial and principal address of the limited partnership;
  • Name and address of the registered agent;
  • The name and mailing address of each general partner LLC; and,
  • That there are at least two partners in the partnership, and at least one of them is a general partner.

One should also note that a general partnership may become a limited liability partnership (LLP) and limited partnerships may become a limited liability limited partnership (LLLP), by filing a registration statement with the Colorado secretary of state.

The above article was prepared by John McGuire, a business attorney at The McGuire Law Firm.  Please consult directly with your business attorney or other advisors regarding your specific issues.