FBAR – Tax Practitioners and Professional Responsibility

U.S. Taxpayers, who fail to file FBAR’s to disclose foreign bank accounts, may seek a reasonable cause exception based on their “tax preparer’s” failure to file the FBAR.

Tax Practitioners (Attorneys, CPA’s) must comply with the FBAR rules as part of their due diligence (as to accuracy) obligation under IRS Circular 230 (Section 10.22).

The FBAR (TD F 90-22.1) is not a tax return.  The FBAR is an information report required under the Bank Secrecy Act (BSA) 31 USC 5314 (and related regulations CFR 103.24, 103.27).  Related records are required under 31 CFR 103.24 and 103.32.

The Practitioners’ professional responsibility does not require that the Practitioner “audit” their client.

The Practitioner must:
1. Make reasonable inquiries in response to Taxpayer’s information of overseas accounts/transactions.
2. A Practitioner may rely on information provided by a client in good faith.
3. The Practitioner must make reasonable inquiries if information appears incorrect, inconsistent or incomplete.

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