Paperwork and Punishment: It's Time to Fix FBAR
6 Pages Posted: 17 Oct 2014
Date Written: October 13, 2014
The Foreign Bank Account Report, or FBAR, is part of a regime designed to stop terrorists, money-launderers, and tax evaders. Unfortunately, its increasingly draconian requirements and consequences now apply to millions of innocent bystanders who are collateral damage in the ongoing battle against financial crime. Their inclusion in the FBAR regime is a massive waste of both government and taxpayer resources, effectively criminalizing activities that are wholly unconnected to financial crime, and perversely discouraging compliance. All of this is unnecessary because as the administrator of FBAR, Treasury can immediately fix the problems. The difficulty is that FBAR is still relatively obscure to those not caught in its grasp, and the extent of the damage it is doing to U.S. taxpayers and to the integrity of the tax system is thus under-appreciated. This damage is real, but it can be reversed by re-focusing FBAR where Congress intended: on likely criminal activity. In short, this Essay demonstrates that the FBAR regime is broken and it is time for Treasury to fix it.
Keywords: FBAR, citizenship, nationality, taxation, tax policy, international tax, financial crimes, FinCEN, Treasury, IRS, administration, penalties
JEL Classification: H11, H21, H87, F02, F50, F53, F59, Z13, E63, H2, K33, K34, N40, P45
Suggested Citation: Suggested Citation