FBAR Penalties for Late Filing, Failure to File & More

The IRS Can Impose Severe Penalties on Taxpayers Who Fail to File FBAR

The penalties for not filing FinCEN Form 114 (Report of Foreign Bank and Financial Accounts) are $10,000 for non-willful violations and $100,000 for willful violations. Set in 2004, the penalties are indexed to inflation, and as of 2026, they're $16,536 and $165,353, respectively, though the willful violation penalty can get up to 50% of your account balance. 

The IRS doesn't always apply these penalties right away, and depending on why you're behind, you may be able to get caught up on your filing requirements without incurring these penalties. 

Key takeaways

• FBAR penalties for individuals started at $10,000 and $100,000 for non-willful and willful violations, respectively, but the penalties increase annually with inflation. 
• Businesses may face additional penalties for not following rules related to reporting foreign accounts.
• If you show reasonable cause for not filing, the IRS will typically waive the penalties.
• The IRS used to guarantee penalty relief for qualifying taxpayers through its FBAR delinquent submission procedures, but the IRS no longer guarantees that type of administrative relief.
• Penalties are only 5% of your account balance during the highest balance year associated with the disclosure if you qualify for the agency's streamlined disclosure procedures. 

How Much Are FBAR Penalties?

As of 2026, the maximum penalty for a non-willful FBAR violation is $16,536. Willful FBAR violations can incur penalties of the higher of $165,353 or 50% of the balance in your foreign account. Originally set at $10,000 and $100,000, these penalties are indexed to inflation, and they increase every year. 

The penalties can potentially exceed the balance in your foreign accounts. For example, say you have $50,000 in your foreign bank accounts, and the IRS determines that you have committed a willful FBAR violation. Your penalty can be up to $165,353. If you have $3 million in your foreign accounts, the FBAR willful violation penalty can be up to $1.5 million. 

Penalties for Business Violations of the Bank Secrecy Act (BSA)

The IRS can also assess negligent violation penalties to financial institutions and non-financial trades or businesses that do not follow FBAR reporting and recordkeeping requirements as covered in the Bank Secrecy Act (BSA). As of 2026, the penalties for willful violations start at $71,545 per transaction and go up to the greater of the amount of the transaction or $286,184.  Originally, these inflation-adjusted penalties were $25,000 and $100,000. As of 2026, FinCEN has assessed record-breaking penalties of up to $125 million. Although these penalties don't affect individuals, they show that the government is serious about these rules — so if you have a foreign account, your bank is likely to report it. 

Legal Codes for FBAR Civil Penalties

As indicated above, there are four civil penalties related to FBAR violations. Here are the penalties and the U.S. Code that outlines the specific laws surrounding each of these penalties. 

• Negligent activity 31 USC 5321(a)(6)(A).
• Pattern of negligent activity 31 USC 5321(a)(6)(B).
• Penalty for non-willful violation 31 USC 5321(a)(5)(A) and (B).
• Penalty for willful violations 31 USC 5321(a)(5)(C). 

Willful Vs. Non-Willful FBAR Penalties

Non-willful penalties typically apply when you exercised due caution to stay compliant with the filing requirements. Willful penalties apply when you knowingly chose not to file your FBAR, you recklessly disregarded the rules, or you chose not to learn about the requirements (aka willful blindness). A willful penalty can be ten times higher (or even more) than a non-willful penalty. However, non-willful penalties are assessed per year, as ruled by the Supreme Court in Bittner v. United States in 2023, while willful penalties can apply per account per year. 

FBAR Willful Reckless Disregard

Here is an example of willful recklessness with the FBAR. Say that you complete your return, and you tick a box on Schedule B saying that you do not have any foreign assets, and another box saying that you don't have to file an FBAR. 

When the IRS contacts you about the unfiled FBAR, you claim that you didn't know about the reporting requirement and didn't notice which boxes you ticked on your Schedule B. This may be considered reckless behavior or potentially even tax evasion (which is a crime). When you sign your tax return under penalty of perjury, you are declaring that the information submitted is correct. 

Ticking boxes without reading questions or reporting incorrect information is reckless. By extension, the IRS can assess willful penalties in these situations. 

FBAR Willful Blindness

Willful blindness occurs in cases where you didn't know about the FBAR filing requirement, and you went out of your way to maintain your ignorance. In other words, you should have known about the FBAR reporting requirement, but you didn't.  Again, you don't necessarily need intent for the IRS to assess a willful FBAR penalty. The government can assess your willfulness based on recklessness and blindness. 

Civil Willfulness vs. Criminal Willfulness

The above penalties are all civil penalties. If the IRS assesses a civil penalty, you just pay the penalty. You don't worry about criminal charges or jail time. However, in rare cases, the government can assess willful criminal penalties on taxpayers who don't file FBARs. Generally, taxpayers only face criminal FBAR penalties when they are also being accused of other financial crimes such as money laundering and tax evasion. 

Criminal FBAR Penalties

Under U.S. Code 31 U.S.C. §5322, you can face criminal FBAR penalties of up to $500,000 and a prison term of up to 10 years. These penalties can apply if you willfully failed to file an FBAR or filed a false FBAR. Again, however, criminal penalties generally only apply in cases where other crimes are involved. 

What Is the Maximum FBAR Penalty?

There is no cap on willful FBAR violation penalties, and this rule has been upheld through several Federal circuit court rulings. The penalties are up to $165,353 or 50% of the account balance per account per year, with no upper cap.

In 2009, Mr. Kahn willfully failed to report the funds in his foreign bank accounts. He had just over $8.5 million in two Swiss bank accounts. Because it was a willful failure to file the FBAR, the government assessed a penalty of $4.26 million, which was equal to 50% of his aggregate account balances. The lawyers for his estate argued that a 1987 Treasury Department Regulation limited the penalty for willful FBAR reporting violations to $100,000. The government claimed that a 2004 statutory amendment superseded the regulation. The courts sided with the government in this case, just as they had in several similar Federal District Court cases. 

Why Are FBAR Penalties So Severe?

The government uses FBAR penalties to scare taxpayers into compliance and reduce the risk of money laundering and other financial crimes. That is why the Financial Crimes Enforcement Network (FinCEN) handles these returns instead of the IRS directly. FBAR penalties have little to nothing to do with tax; they're about reducing money laundering risks. Even if you report and pay tax on the income from your foreign accounts, you may still face a penalty if you don't file your FBAR. 

How Does the IRS Calculate FBAR Penalties?

Once the IRS realizes that you have unfiled FBARs, the agency will assign an examiner to your case. The examiner will attempt to get more details about your foreign accounts and learn why you didn't file the FBAR. You need to navigate this process carefully. The FBAR penalties quoted above are maximums — the examiner can also decide to assess no penalties or smaller penalties on your account. 

The examiner is also the person who makes the initial determination of whether your behavior was willful or non-willful. One examiner may consider the situation aggravated negligence but still non-willful. Another examiner may claim that the same set of facts constitutes reckless disregard and thus warrants a non-willful FBAR penalty. 

Luckily, this decision isn't final. The FBAR Counsel must approve all non-willful FBAR penalties. And you have the right to appeal the assessment and even take the issue to litigation if needed. 

How to Reduce the Risk of FBAR Penalties

The best way to avoid FBAR penalties is to file your FinCEN 114 accurately and on time. If you realize that you missed filing an FBAR, be proactive. It is always better to contact the IRS before the agency contacts you. If the IRS contacts you about unfiled FBARs, reply promptly and provide the requested information, but consider getting a licensed tax professional to represent you so you don't say the wrong thing. Even in this case, you may still be able to avoid penalties if the IRS believes that you had a reasonable cause for missing the filing requirement. 

History of FBAR Penalties

In 1970, Congress passed the Bank Secrecy Act (BSA), which contained a requirement for individuals to report their foreign bank accounts. In 1972, the Secretary of the Treasury created the FBAR form so that individuals could report their foreign bank accounts when they filed their income tax returns. 

These rules were designed to reduce the risk of money laundering and other financial crimes. As these issues became a more significant problem, Congress passed the Money Laundering Control Act of 1986, and this act included the first penalty for willful failure to file FBAR. After 9/11, Congress decided to increase the willful FBAR penalty again. In 2004, the government passed a statute that increased the penalty for willful failure to file FBAR to the greater of $100,000 or 50% of the aggregate balances in the foreign bank accounts. The $100,000 is indexed for inflation, so it typically increases every year. 

FBAR Penalty Waivers

There are situations where you can file late FBAR without incurring penalties. In other cases, an examiner may look at your case's circumstances and decide to issue you a warning without any penalties. If you've been assessed FBAR penalties, you can apply to have them waived, appeal the case, or pursue the issue through litigation. 

FBAR Penalty Mitigation Guidelines

The IRS may mitigate the penalties in cases that don't involve tax fraud or criminal charges. Mitigation affects both willful and non-willful violations, and although it's subject to IRS approval may include the following reductions:

• $500 per year for non-willful violations if the maximum aggregate balance of all foreign accounts is less than $50,000.
• The greater of $1,000 per year or 5% of the maximum account balance for willful violations if the maximum aggregate balance of all foreign accounts is less than $50,000.
• $5,000 per year for non-willful violations if the aggregate account balance for the year is between $50,000 and $250,000.

FBAR Penalty FAQ

When did the Supreme Court rule that FBAR penalties were per form and not per account?

In 2023, the Supreme Court ruled in United States v. Bittner that the penalties were per form (aka per year that you didn't file an FBAR report) rather than per account. 

What is a Section 26 miscellaneous offshore penalty?

It's a penalty of 5% of the balance of unreported foreign accounts. It means the IRS uses its administrative powers under Section 26, rather than applying penalties from Section 31 of the tax code, which covers the Bank Secrecy Act (BSA) and penalties for not filing FBARs.

What's the FBAR penalty if you use the streamlined filing procedures?

The penalty is 5% of the account balance for the year with the highest aggregate balance. For example, if you have $100,000 in your accounts in the highest year related to the disclosure, the penalty is $5,000; otherwise, it would be $10,000 (indexed to inflation) per year you didn't file the FBAR. You can only use the streamlined option if you didn't act willfully.

Why did the IRS remove the delinquent submission penalty waiver guidelines?

The IRS removed its FBAR delinquent submission guidelines and its guarantee that you wouldn't get a penalty if you meet these guidelines in 2026. The agency had a right to do so since the delinquent FBAR submission processes are based on administrative guidelines, not legal code.

Get Help With FBAR Penalties

If you're dealing with FBAR penalties, contact a tax professional today. Using the TaxCure directory, you can search for tax lawyers, CPAs, and enrolled agents who have experience helping taxpayers with this specific issue. 

Post reviewed by Sean O'Connor, a tax attorney from Connecticut, and Edward Parsons, a CPA based in Florida.

Late FBAR Filing: How to Minimize Risks When Filing FBARs for Previous Years

The IRS says to file delinquent FBARs as soon as you realize you're behind, but doing so puts you at risk of penalties and potential criminal exposure if the failure to file was willful. Depending on the details, you may be better off going through the IRS's streamlined filing compliance procedures or its Criminal Investigation Voluntary Disclosure Practice.

Before moving forward, use TaxCure to find a licensed tax professional experienced with informational reports for international accounts and assets. 

Key takeaways

• IRS advice: file delinquent FBAR's as soon as possible.
• The risk: filing late exposes you to penalties, unless you qualify for reasonable cause relief.
• Penalties: $10,000+ for non-willful failure to file, $100,000+ for willful failure to file, with both tied to inflation and over $16,000 and $160,000 as of 2026
• Other options for non-willful late FBARs: streamlined filing compliance caps penalties at 5% if you qualify.
• What if failure to file was willful: a tax attorney can help you decide if the IRS's Voluntary Disclosure Practice is the right option to minimize criminal risk and penalties. 

How to File a Late FBAR: Three Options 

If you missed an FBAR reporting requirement, the IRS says, "you should file late FBARs as soon as possible to keep potential penalties to a minimum," but only if "the IRS hasn't contacted you about a late FBAR and you're not under civil or criminal investigation by the IRS." To do so, file the FBAR online for the years you missed, but be aware this may subject you to penalties. To protect yourself, you may want to check if you qualify to use the IRS's streamlined filing compliance procedures or the Criminal Investigation Voluntary Disclosure Practice if you're at risk of criminal exposure. In all cases, strongly consider consulting with an experienced tax professional.

The following sections look at how to file a late FBAR online, the streamlined compliance procedures, and the VDP in more detail. 

Filing a Late FBAR Online With the BSA E-Filing System

As long as you're not under audit or have received an IRS notice about the late FBAR, you can file foreign bank account reports (FBARs) as usual. Go to the BSA's online filing system, complete the form as usual, but make sure you note the correct tax year and use the drop-down menu to explain why you're filing late.  If you don't see an applicable reason, select "other" and note your own. If you have unreported income related to these accounts, you'll also need to amend your tax returns and pay the tax, penalties, and interest as calculated.

Prior to 2026, the IRS's delinquent FBAR submission procedures protected taxpayers from penalties in this situation. As long as you didn't have any unreported income related to the foreign accounts, you could file without incurring penalties. However, that was not part of the tax code. Rather, it was simply an IRS administrative practice. In July 2026, the IRS removed all of the details about the FBAR delinquent submission procedures from its website, indicating that this option is no longer available. Currently, the IRS's website explains, "Filing an FBAR late or not at all is a violation and may subject you to penalties." But as indicated above, the agency still urges taxpayers to file their late reports as soon as possible. 

How to Complete the FBAR Late Filing Explanation

On the first page of the FBAR, you should see a drop-down box with a list of the most common reasons for late filing:

1. Forgot to file FBAR.
2. Didn't know that you had to file FBAR.
3. Didn't realize your foreign account balances were over the reporting threshold.
4. Didn't know that your account was considered a foreign account.
5. Didn't have your account statement in time to file on time.
6. Lost your account statement and just got the replacement.
7. Missing account information.
8. Couldn't get your spouse's signature on time.
9. Unable to file the FBAR online when it was due.

If you don't see your reason for filing a late FBAR on the list, choose option "Z: other" and then write in your FBAR late filing explanation. You only have 750 characters (about 135 words), so be precise. If you're filing late because an earlier FinCEN filing waiver applied to you, note the waiver by number in the text box. Choose your answer carefully. If the IRS decides to assess FBAR penalties, you may need to rely on reasonable cause for penalty relief. That requires convincing the IRS that you acted with care, but conditions outside your control prevented you from filing on time. 

Streamlined Filing Compliance Procedures for Delinquent FBARs

The streamlined filing compliance procedures can reduce FBAR penalties, but to qualify, you must:

• not be under IRS audit or criminal investigation (even if not related to foreign accounts)
• certify that the failure to file FBARs was not willful
• have a valid taxpayer identification number (TIN) 

US residents should use the Streamlined Domestic Offshore Procedures (SDOP), while residents of foreign countries should use the Streamlined Foreign Offshore Procedures (SFOP). Amend tax returns with income related to the FBARs and note that you're filing under the "streamlined domestic offshore procedures" or foreign offshore procedures at the top of the return. Then, file the FBAR reports. 

Domestic taxpayers will incur a penalty of 5% of the highest aggregate account balance from the years involved. For instance, if you use streamlined filing compliance procedures to catch up on FBARS from 2021 to 2025 and your accounts had the highest aggregate balance in 2024, your penalty will be based on the aggregate balance on the last day of that tax year.  

How to File FBAR Under the Streamlined Procedures

The exact process can vary based on your situation, but here's an overview of the typical steps:

1. File or amend your tax returns.

File or amend your individual income tax returns for the years you didn't file or report income from your foreign accounts. For example, if you didn't report interest from one or more foreign bank accounts, report that using an amended return or a new return if you didn't file at all.  

Typically, you only need to amend the last six years of returns to get back into filing compliance, but by law the IRS can require additional years. And the rules governing FBAR reports aren't the same as most IRS forms. So, if you're dealing with more than six years of unfiled FBAR reports, reach out to a tax professional.

2. Add additional forms related to foreign income or assets.

You may need to file some of the following forms when amending your tax returns. The forms you need to file vary based on the type of foreign accounts and income you have.

• Form 3520 (Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts)
• Form 3520-A (Annual Information Return of Foreign Trust With a U.S. Owner)
• Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations)
• Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business )
• Form 8938 (Statement of Specified Foreign Financial Assets)
• Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation)
• Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund )

3. Note that you're using the streamlined procedures.

When you send in your amended returns, write "Streamlined Domestic Offshore" or "Streamlined Foreign Offshore" at the top of your amended returns. Writing this ensures they get processed correctly.

4. Pay any tax owed.

Your new tax returns will lead to a higher tax liability. This is due to the unreported foreign income. You may also face failure-to-file penalties related to the unreported income. You must pay the delinquent tax liability to participate in the streamlined program. 

5. File your delinquent FBAR reports.

You also need to file the last six years of FBAR returns using FinCEN Form 114 (Report of Foreign Bank and Financial Accounts). You must file this form online on the BSA -Efiling System. Normally, you only have to file Form 114 if the aggregate balance on your foreign accounts exceeds $10,000 during the tax year. However, if you're using the streamlined process, you need to file all six years regardless of the balances in your account for each year. 

6. Fill Out Form 114a If Needed

If someone else (including your spouse) is filing the FBAR on your behalf, you need to fill out Form 114a (Record of Authorization to Electronically File FBARs ).

7. File Form 14654 or 14653

Finally, you tie everything together with Form 14654 (Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures) or Form 14653 (Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures). You can download these forms from the IRS's website.

FBAR Penalties When You Use the Streamlined Procedures

Domestic taxpayers who use the FBAR streamlined procedures must pay a penalty of 5% of the value of their unreported accounts, instead of facing the usual FBAR penalties. Some accounts, such as certain Canadian retirement accounts, may be exempt from this fee. The fee will also apply to any unreported foreign assets covered under the Foreign Account Tax Compliance Act (FATCA).

IRS Criminal Investigation Voluntary Disclosure Practice

If you willfully failed to file an FBAR, you may need to use the IRS Criminal Investigation Voluntary Disclosure Practice. This program allows people who have committed tax-related crimes to come forward voluntarily. Using this program doesn't eliminate your criminal exposure, but the IRS looks more favorably on taxpayers who came forward on their own when reviewing cases. 

To apply for this program, submit Form 14457 (Voluntary Disclosure Practice Preclearance Request and Application). Once the IRS gives you preclearance confirmation, fill out Part II of the form within 45 days. If you're approved to participate, the IRS Criminal Investigation will send you a Preliminary Acceptance Letter.

The IRS will assign an examiner to your case, and you will work directly with them to resolve the issue. You may want to hire a tax lawyer to help with this process. 

What to Do After You File Delinquent FBAR Reports

After you file the delinquent FBAR, keep a copy of your paperwork for your records. If you file online, you may not even get a response. The IRS treats these returns the same as any other returns it gets. 

When you use the streamlined procedures, you generally will not get a response letting you know that the case has been closed, but you should receive a processing notice for the amended return that you filed. The Voluntary Disclosure Practice includes a lot of back and forth with the IRS, and you will know when your case is resolved. 

FAQs on Late FBAR Filings

What are the delinquent FBAR procedures?

They were an IRS administrative remedy that allowed taxpayers to file delinquent FBARs without penalties as long as they had reported any income related to the foreign accounts properly. The IRS removed the FBAR delinquent filing procedures from its website in July 2026 with no press releases or announcements.

Does the IRS assess penalties for delinquent FBAR submissions?

Potentially, but not always. The IRS has the authority to waive late FBAR filing penalties or not apply them at all. Previously, the agency allowed taxpayers to avoid FBAR penalties under its official delinquent FBAR submission procedures, but the agency removed that section of its website in July 2026 without any additional explanation.

How do I file delinquent foreign information returns?

If you're not under audit or criminal investigation, you can use the IRS's delinquent international information return submission procedures. Amend your tax return and include the missing foreign information returns. The IRS will assess penalties based on current practices, but for greater relief, attach a reasonable cause explanation outlining why you filed late.

Should I use the delinquent or streamlined filing procedure for late FBARs?

If you don't have any unreported income related to the foreign accounts, you may just want to file your FBAR reports without notifying the IRS, but be aware that as of July 2026, the IRS no longer guarantees penalty relief for these types of filings (previously called the "FBAR delinquent filing procedures"). If you have unreported income, you may need to use the streamlined offshore disclosure option, but only if your actions weren't willful and you're not under audit or investigation.

What's a quiet FBAR disclosure?

It's when you amend tax returns to report income related to your foreign accounts, and you file your delinquent FBAR reports, but you don't do anything else to alert the IRS about the process. While a quiet disclosure works for some, it's a risky option for others, so talk with counsel first.

Get Help With Delinquent FBAR

You don't have to navigate this process on your own. There are tax attorneys and other tax professionals with extensive experience navigating delinquent FBAR reports. With TaxCure, you can search for a pro based in your area or a more experienced pro who helps clients remotely with international tax problems. The site lets you search by area, credentials, and experience — don't wait: contact a tax pro for help today.

Post reviewed by Sean O'Connor, a tax attorney from Connecticut, and Edward Parsons, a CPA based in Florida.

FBAR Reporting Requirements: Everything You Need to Know for Compliance

You must file an FBAR if the total balance in your foreign bank accounts exceeds $10,000 at any time during the year. Foreign bank account reports (FBARs) are due April 15th but eligible for an automatic six-month extension, and you file the report through the FinCEN BSA E-Filing System, not with your regular tax return. The penalties for not filing are over $16,000 per year for non-willful violations and over $160,000 for willful violations. 

Key takeaways

• All US tax residents must file an FBAR if their account balances exceed $10,000 (aggregate) at any point in the year. 
• Reportable accounts include most foreign bank accounts, as well as securities, mutual funds, annuity contracts, and life insurance at foreign financial institutions and accounts at foreign branches of US banks.
• You don't have to include foreign accounts owned in US retirement accounts or foreign accounts owned by trusts on your individual report.
• E-file Form 114 with the Financial Crimes Enforcement Network by April 15th. Don't attach it to your tax return. 

Who Needs to File an FBAR?

All US tax residents must file an FBAR if the total balance in their foreign bank accounts exceeds $10,000 at any point in the tax year. The requirement applies to U.S. citizens even if they live abroad and to U.S. residents as well as domestic trusts, domestic estates, and other domestic entities. 

The threshold applies to the total balance in all your foreign bank accounts. For instance, if you have one bank account with $4,000 and another with $7,000, you're over the threshold and need to file. 

Types of Foreign Accounts Affected by FBAR

 The FBAR reporting requirements apply to most foreign bank accounts, including:

• Foreign stock or securities in an account at a foreign institution.
• Accounts at foreign branches of U.S. banks.
• Foreign mutual funds. 
• A foreign financial institution-issued life insurance or annuity contracts with cash value.

A few foreign accounts don't trigger an FBAR reporting requirement. You don't have to include the following on your FBAR form:

• U.S. military banking facility accounts.
• Foreign accounts owned by your retirement accounts, such as IRAs.
• Foreign accounts owned by retirement accounts that you're a beneficiary of.
• Foreign accounts that are part of a trust that you're a beneficiary of — in this case, the trust should file the FBAR, not you.
• Correspondent accounts — Also called vostro or nostro accounts, banks typically use these accounts to store money at other financial institutions. 
• Accounts owned by government entities or international financial institutions. 

If you have a lot of foreign assets and are unsure whether they trigger an FBAR reporting requirement, reach out to a tax professional. They can help ensure that you're in compliance. You can find one using our site by clicking "find a tax pro" at the top of the page.

Account Balances and Exchange Rates

The FBAR reporting rules apply to the cumulative balance in your foreign accounts. You must file an FBAR if the total balance was over $10,000 at any point in the year. If your account balances are close to the threshold, you'll have to crunch some numbers — use the Treasury Reporting Rates of Exchange. The Treasury website has exchange rates for nearly every foreign currency, and you can look at the rate for every single day over the last 20 years. 

Don't just consider the balance in your accounts on the last day of the year because your account balances are likely to fluctuate during the year. If you have a single foreign bank account, figure out the date it had the highest balance. Then, convert the balance to U.S. dollars based on the exchange rate applicable on the last day of the year. Even if your highest balance was at a different point in the year, you should still use the exchange rate from the last day of the year. 

If you have multiple accounts, add them together. To ensure you were never over the reporting threshold, look at each account's highest balance day and then add in the balances of your other accounts from that same day. You're still supposed to file if your accounts were only over the reporting threshold for a single day. 

How to Take Care of FBAR Filing Requirements

E-file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts) through the BSA E-Filing System. Do not submit this form with your tax return. 

You can take care of the process entirely online or download a PDF form, fill it out, and upload it. As of 2026, FinCEN does not allow paper or mailed reports. You can also authorize your accountant to file for you, but you'll need to fill out FinCEN Form 114A (Record of Authorization to Electronically File FBARs). Don't send this form to FinCEN. Keep it for your records. 

Information Required on the FBAR Return

When filling out your FBAR return, you need the following details. When filing an FBAR online, you should gather this information before starting.

• Your name, date of birth, and address.
• Social Security number (SSN) or taxpayer identification number (TIN).
• Foreign identification details if you don't have a TIN.
• Total number of foreign bank accounts. 
• Name and address of the financial institutions.
• Account number.
• The maximum value of your accounts during the calendar year, based on your account balances and the Treasury Exchange Rate.
• The number of owners for jointly held accounts.
• Names, TINs, and addresses of joint account holders.
• Whether you have signature authority or financial interest.
• Account owner details for accounts you only have signatory control over. 
• Explain why you have signatory control — for example, your position if your employer owns the account.

If you're going to have an accountant or tax preparer file for you, provide them with these details along with Form 114a. They will let you know if you need more information.

FBAR Reporting Requirements for Spouses

Even if you file your tax return as married filing jointly, you still may need to file your FBAR reports separately. If you individually own an account that your spouse does not own, you need to file separate FBAR forms. 

If you own all of your foreign accounts together, you can file a single FinCEN 114 as long as you meet the following conditions:

• All of the non-filing spouse's foreign accounts are jointly owned with the filing spouse.
• All of the above accounts are noted on the filing spouse's FBAR.
• The filing spouse files the FBAR on time.
• The non-filing spouse has completed Form 114a (Record of Authorization to File FBARs Electronically)

If you don't file a 114a, you both need to file a separate FBAR, even if all of your accounts are jointly owned. 

When Do You Need to File FBAR?

The FBAR due date is April 15th of the year following the year your foreign bank accounts were over the threshold. For instance, if you had over $10,000 in foreign bank accounts in 2021, you should file the FBAR by April 15, 2022. If the 15th is on a holiday or weekend, the due date moves to the next business day. 

The government gives you an automatic six-month extension on the FBAR, and if needed, you can take until October 15th to file. Extensions for nationally declared disasters normally also extend the deadline.

What If You Missed Your FBAR Filing Requirement?

If you didn't realize that you were supposed to file, there are many ways to take care of your delinquent FBAR reporting obligations. As long as you meet all your other filing obligations, you may be able to go online, file late, and not worry about a penalty. 

Suppose you forgot to file your income tax return or didn't report some of the earnings from your foreign bank accounts. In that case, you may need to use one of the IRS's special programs, such as the Voluntary Disclosure Program or the Streamlined Reporting Procedures. 

A tax professional can help you select the right program and help you get back into FBAR compliance. 

Other Reporting Requirements for Foreign Bank Accounts

The Foreign Account Tax Compliance Act (FATCA) requires you to file Form 8938 (Statement of Specified Foreign Financial Assets) with your tax return if you have more than $50,000 in foreign bank accounts or other types of foreign assets. This is in addition to your FBAR report.

FAQs on FBAR Reporting Requirements

What are the FBAR reporting thresholds?

A total balance of $10,000 or more in your foreign bank accounts at any time during the tax year. For example, if the combined (aggregate) balance on your foreign bank accounts was $10,020 on any day of the last year, you must report it. 

What are the foreign bank account reporting requirements?

The law requires U.S. citizens to report foreign bank accounts if their total balance exceeds $10,000. You file the report with the Financial Crimes Enforcement Network (FinCEN), not with the IRS.

What are FBAR taxes?

FBAR taxes may refer to taxes owed on income earned from foreign bank accounts or to the FBAR penalty. The FBAR is a foreign bank account report, and this informational report does not lead to a tax liability. However, if you earn interest or other income on your foreign bank accounts, you must report the income on your tax return and pay tax accordingly. If you file the FBAR late, you can incur a penalty, even if you didn't have any income from those accounts. 

What is the FBAR filing exchange rate?

The U.S. Department of the Treasury Financial Management Service (FMS) rate on the last day of the tax year applies to FBAR reports. If the FMS doesn't include the currency your account is in, you can use another verifiable source. 

When are FBAR reports due?

They're due April 15th or the next business day following the tax year, but you can take until October 15th without incurring any penalties, thanks to the automatic six-month extension.

Get Help Meeting Your Reporting Requirements

Still wondering if you have to file an FBAR? Want help understanding and meeting your requirements? Then, contact a tax professional today. Using TaxCure, you can search for CPAs, enrolled agents, and tax attorneys in your area who have experience helping clients meet their FBAR requirements.

Post reviewed by Sean O'Connor, a tax attorney from Connecticut, and Edward Parsons, a CPA based in Florida.

Foreign Bank Account Reporting (FBAR): Delinquent Consequences & Options

The IRS requires taxpayers to report foreign bank accounts with an aggregate balance over $10,000. If you don't report your accounts, you can face significant penalties, but don't panic — in cases of a simple oversight, you can often get back into compliance with little trouble. To protect yourself, you need to understand the rules about foreign bank account reporting (FBAR). Ideally, if you're behind, you also need to take care of the situation before the IRS contacts you. Here is an overview of FBAR filing requirements and links to resources with more information. 

Key takeaways

• The FBAR is a report of foreign bank accounts, and you must file it if your total account balances exceed $10,000.
• Penalties for not filing are $165,353 per year for willful failure to file and $16,536 for non-willful failure to file, as of 2026.
• The IRS says to file late reports as soon as possible, but as of July 2026, the agency removed guarantees about penalty waivers under the delinquent filing procedures from its website.
• Streamlined filing compliance processes can help qualifying taxpayers minimize FBAR penalty risk. 

What Is the FBAR?

What does FBAR stand for? FBAR stands for foreign bank account reporting. You will also see this acronym used after the phrase Report of Foreign Bank and Financial Accounts. That's the name of the form you need to file. 

How Do You File an FBAR?

To report your foreign bank accounts to the government, you must file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts). Don't file this form with your tax return and don't send it to the IRS. Instead, file it online with the Financial Crimes Enforcement Network (FinCEN).

When Does FBAR Need to Be Filed?

The FBAR is due the same day as your tax return — April 15th of the year following the year the balance in your foreign accounts exceeded $10,000. But every year, you have an automatic FBAR extension until October 15th. As long as you file by October 15th, your FBAR is on time. 

What Information Do You Include on the FBAR?

When you file the FBAR, you will need your foreign account numbers, their highest balances during the year, and contact details for your financial institution. You should report all accounts that you have financial or signatory control over. 

TaxCure Resources About Filing FBARs, Late FBARs, and More

Here are links to detailed resources with information on FBAR filing requirements, late filing penalties, and how to deal with late reports.

Resource: FBAR Reporting Requirements

Overview: If the aggregate balance in your foreign bank accounts is over $10,000 at any time in the tax year, you must file FinCen 114 (Report of Foreign Bank and Financial Accounts). You can file this form online through the BSA E-filing system of the Financial Crimes Enforcement Network (FinCEN). 

Resource: Late FBAR: What Happens If You Forget to File FBAR?

Overview: If you forget to file an FBAR, you may be able to file without penalties before the IRS notices, but late filing is subject to penalties, so reach out to a tax professional for guidance. Once the IRS contacts you about an unfiled FBAR, you typically must undergo an examination. The examiner will gather details about your accounts and why you didn't file. Then, they will decide which penalties to assess. The examiner may just issue a warning with no penalties in some cases.

Resource: How to Catch Up on Delinquent FBARs 

Overview: You can file the delinquent foreign bank account reports in what's known as a quiet disclosure, and the IRS may or may not decide to assess penalties. Prior to July 2026, the IRS's website advertised a delinquent submission procedure that allowed qualified taxpayers to catch up without penalties, but that guarantee is no longer available. If you're not under audit or investigation, you may qualify to use the IRS's streamlined FBAR procedures. This is generally the best option if you have unfiled tax returns or unreported foreign income in addition to the unfiled FBARs. The process varies slightly depending on whether you live in the United States or abroad. Domestic taxpayers face a penalty of just 5% of their highest balance during the disclosure period.  If you are worried about criminal exposure due to wilfully not filing your FBAR, you may need to use the IRS's Criminal Investigation Voluntary Disclosure practice to catch up. 

Resource: FBAR Penalties

Overview: FBAR penalties are some of the harshest penalties imposed by the IRS. There is no tax due with your FBAR, so you don't owe any back taxes if you don't file. But as of 2026, the IRS can assess non-willful civil penalties of up to $16,536 and willful non-filing penalties up to the greater of $165,353 or 50% of the account balances. Individual taxpayers have been assessed penalties well into the millions, but due to rulings in various Tax Court cases, the FBAR penalty now applies per year, not per account or form. 

Resource: Reporting Requirements for Specified Foreign Assets

Overview: In addition to the FBAR requirements, the IRS requires taxpayers to report specified foreign assets. This rule applies to slightly different assets than the FBAR, and it has a higher reporting threshold. If you have specified foreign assets over the threshold for your situation, you must file Form 8938. There are severe penalties for not filing this form. 

Appealing FBAR Penalties

You may have to appeal if you cannot negotiate a favorable agreement with the examiner working on your FBAR case. You can appeal both assessed and pre-assessed penalties. Keep in mind that they start to accrue interest once penalties are assessed. That is why it is often better to appeal pre-assessed penalties. You can pursue litigation if the appeals case does not go your way. 

Payment Options for FBAR Penalties

Once the IRS assesses the FBAR penalties, the IRS expects you to pay them in full. But if you can't, you may be able to make arrangements. Depending on your situation, the options can include payment plans, offers in compromise, hardship status, or penalty abatement.

Get Help With FBAR

The FBAR requirements can be complicated, and the stakes are high if you're under examination. Don't deal with FBAR on your own. Get help from a tax professional who is experienced with foreign bank account reporting requirements. A tax professional can take care of unfiled FBAR reports, provide guidance through an FBAR examination, appeal FBAR penalties, or help you make payment arrangements on FBAR penalties. Use TaxCure to search for a local tax professional who can help you with FBAR today. 

Alabama Back Taxes Help: Self-Help and Resolution Options

If you are facing back tax issues with the State of Alabama, you’re in the right place. Whether you are looking for a tax relief professional (EA, CPA, or Attorney) or you want to tackle it yourself, we can help. Below, you'll find state contact information and tax options to save money and/or achieve compliance. You can also search for Alabama tax relief specialists in your area by selecting State Agency, the Alabama Department of Revenue, entering your zip code, and selecting your tax issue.

The Alabama Department of Revenue (ALDOR) collects individual and business taxes. If you have unpaid back taxes, the Collection Service Division of the ALDOR has the right to collect them from you involuntarily. This in-house collection department can garnish your wages, issue tax liens on your assets, seize your bank accounts, or order your assets auctioned off for sale. 

Contact Information for the Alabama DOR

If you need to contact the Alabama Department of Revenue for assistance, use the following phone numbers:

• Individual Taxes: 334-242-1170 option 5
• Business Taxes: 334-242-1170 option 5
• General Inquiries: 334-242-1170 option 5
• Other Matters (Collections): 334-242-1220

If you owe back taxes to the state of Alabama, this guide explains your options and then explores what can happen if you don't pay your taxes. To get help with Alabama back taxes, contact an Alabama tax professional today.

Resolution Options for Alabama Back Taxes

To protect yourself from harsh collection activities, you need to contact the ALDOR as soon as possible and make arrangements to take care of your unpaid state tax liability. Luckily, the state of Alabama has many options for taxpayers who can’t afford to pay their taxes in full, including the following:

Payment Plan for Alabama Back Taxes

The ALDOR may be willing to let you pay off your back taxes in monthly installments. To apply for a payment plan on Alabama taxes, submit an Installment Payment Request with a Collection Information Statement to the ALDOR.

The Installment Payment Request requires you to note the proposed amount of your monthly payment and sign an affidavit agreeing to the terms of the payment agreement. The ALDOR accepts payment plans on a case-by-case basis, and all payment plans may be considered balloon notes where the balance is due at the end of the agreement.

For instance, if you owe $7,200 and the state agrees to accept monthly payments of $100 for four years, you will owe a balloon payment of $2,400 at the end of the agreement. Note that this example uses sample numbers to show you how the balloon payment works. These numbers do not take interest or penalties into account.

Include your first monthly payment with your request. Note that your payment plan may go into default if you get behind on future tax filing or payment requirements. The ALDOR can also revoke your payment plan if your financial situation changes and you can pay your tax liability in full.

Offer in Compromise

An offer in compromise lets you pay off your taxes for less than you owe, but the ALDOR does not accept offers in compromise when taxes are legally due.

If you owe Alabama state taxes, you will not be able to settle them for less than you owe through this type of program. However, you may be able to use penalty abatement to reduce the portion of your outstanding tax liability related to penalties. Or, if you qualify, you may be able to reduce your tax liability through the innocent spouse program.

Alabama Innocent Spouse Relief

Typically, when a married couple files a return together, they are jointly responsible for the tax due. However, under Alabama state law, you may qualify for innocent spouse relief if the following statements apply:

• The tax bill was due to the unreported or misreported income of the other person on your joint return.
• You were unaware and did not have reason to know that the income was not reported correctly.
• You have proof that you didn't know about the issue.
• It would be unfair to hold you responsible for the tax liability.
• You were granted innocent spouse relief from the IRS.

Note that laws can change, and in some cases, Alabama does not keep pace with federal law. For example, in 2011, a woman who was granted innocent spouse relief from the IRS was denied that same relief in Alabama. The federal law had been updated in 1998, but the state law had not followed suit yet.

To avoid these types of risks, you should work with a tax resolution specialist who is experienced with Alabama state taxes and not exclusively focused on IRS taxes.

Alabama Injured Spouse Allocation

In Alabama, you can also apply for injured spouse allocation. This applies in cases where your Alabama tax refund will be seized by the government to cover debts only owed by your spouse.

For instance, if your spouse owes child support or back taxes, the state can keep your refund. However, through this program, you can ensure that the state only keeps the amount related to your spouse and not the amount related to you.

To apply, contact the Alabama Department of Revenue for the appropriate forms that they would like you to file.

Penalty Abatement in Alabama

The ALDOR may be willing to waive penalties if you can prove reasonable cause. Reasonable cause includes death, major illness, natural disasters, inability to obtain records, reliance on the advice of a competent tax advisor, or reliance on the incorrect advice of someone from the ALDOR.

You may also be able to claim reasonable cause if you made an honest mistake — typically, this has to be a one-time error, not a repeated issue. To apply for a penalty waiver, submit Form PWR (Request for Waiver of Penalty) to the ALDOR.

Appeals Process

If you disagree with an assessed tax, you have the right to appeal. You have 30 days from the date of the preliminary assessment to request a conference on your case. During the conference, you have the right to present your opinions and discuss your case with a designated hearings officer.

Then, the ALDOR will enter a final assessment. You can appeal a final assessment with the Alabama Tax Tribunal or Circuit Court. Additionally, if your preliminary assessment hasn't been finalized within five years of the date of entry, you can also appeal that assessment to these courts.

Alabama Tax Amnesty Program

A tax amnesty program allows qualifying people with unpaid taxes and unfiled returns to come forward voluntarily without facing persecution. Tax amnesty programs tend to be very infrequent. Alabama last had a three-month amnesty period in 2018.

Bankruptcy

In very specific cases, you may be able to discharge some state taxes through a bankruptcy case. However, some state taxes absolutely cannot be discharged through bankruptcy. Talk with your bankruptcy attorney for details.

Note that when you file for bankruptcy, the courts issue a temporary stay that prevents creditors (including the ALDOR) from taking collection actions against you. If you receive a Final Notice Before Seizure from the ALDOR while you are in the midst of a pending bankruptcy case, call the Collection Services Division at (334) 353-8096 as soon as possible. Make sure to have the details of your bankruptcy case nearby.

Tax Collection Enforcement Actions in Alabama

The ALDOR can use a wide range of tactics to collect unpaid state taxes. In many cases, once these collection actions have been started, they can be difficult or impossible to reverse. That is why you should contact the ALDOR and make arrangements on your unpaid tax bill as soon as you can.

If you ignore Alabama state taxes, you may end up facing the following collection actions.

Tax Liens for Unpaid Alabama Taxes

The state of Alabama can file a tax lien in the Office of the Judge of Probate in the county where you live or own property. You will not be able to sell or transfer your property until the lien has been removed.

The ALDOR does not send a record of the lien to the credit reporting agencies, but the lien is public information and the credit reporting agencies have the right to obtain this info from the county courthouse. If the credit bureaus access this information, the lien will appear on your credit report for seven to 10 years, and it can seriously impair your ability to take out loans or access credit.

Tax Levy for Alabama Back Taxes

A tax levy is when the government seizes your assets to cover your unpaid tax liability. In Alabama, the ALDOR uses the following tax levies:

• Wage garnishment — The state can levy up to 25% of your gross wages.
• Bank levy — The state can seize the full amount in your bank account up to the tax bill.
• Garnishments of third-party holdings — The state can seize insurance proceeds, rental income, or other third-party property owned by you.
• Tax refund offsets — The state can seize your state tax refunds, and it can use the federal offset program to take your IRS refunds as well.

The state can also use a writ of execution to seize and sell your real or personal property.

Writs of Execution

If you have unpaid taxes in Alabama, the ALDOR can ask the sheriff to auction off your property on the courthouse steps to the highest bidder. For real property, you can redeem your property if you pay the total tax liability, the cost of the sale, and the accrued interest. You cannot redeem personal property.

Tax Penalties Charged

If you file a return late, the late-filing penalty is 10% of the tax due or $50, whichever is higher. If you file but don't pay, the late penalty is 1% of the tax due every month, up to a total penalty of 25%. For instance, if you owe $1,000 and pay a day late, your penalty is $10. The next month you pay late, you incur another penalty for 1% of the balance, and so on until you pay the tax or reach the 25% limit.

For business taxes due monthly or quarterly, the late payment penalty is 10% of the tax due. This penalty applies to sales, gas, motor fuels, tobacco, dog race track fees, and several other business taxes.

Loss of Liquor License

If your business taxes are seriously delinquent, the ALDOR can petition the ABC Board to revoke your liquor license. You will not be allowed to sell liquor until you have paid the tax or made other suitable arrangements with the state.

Notices About Delinquent Taxes in Alabama

When you file a state tax return and don't make a payment, the ALDOR will send you notices about the unpaid taxes. The state will also send notices about taxes it has assessed against you. You should receive a notice about preliminary assessments, written information about how to appeal an assessment, and notices about collection actions the state is going to take against you.

One common notice is the Final Notice Before Seizure. This notice means that the ALDOR has gotten serious about collecting the debt, and it will pursue advanced collection actions if the tax bill is not paid in full within 10 days of the date on the letter.

Statute of Limitation on Tax Debt

Generally, there is a six-year statute of limitations on collecting delinquent taxes in Alabama. However, the statute can vary based on the situation. If you omit more than 25% of your income or if you commit state tax fraud, the state may be able to assess and collect taxes owed for an indefinite period of time.

However, this is a civil statute of limitations. The state has just six years to bring criminal tax fraud charges against you. The clock for that crime starts ticking on the date of the last act related to the attempt to evade.

Get Help Dealing With Alabama Back Taxes

You don't have to deal with Alabama back taxes on your own. Whether you have unfiled state returns, unpaid state taxes, assessments that you want to appeal, or other tax issues, a tax pro can help you. To learn more, contact a tax professional experienced with the ALDOR today or leverage the “find a local tax pro” button at the top of the page.

Louisiana State Offer in Compromise: How to Pay Less

The Louisiana Department of Revenue (LDR) has the ability to settle state tax liabilities up to $500,000 for less than you owe. The LDR will only settle tax bills when there is serious doubt of liability or doubt of collectibility. In other words, the state will only approve an offer in compromise if it believes that you are unlikely to owe the tax or unlikely to be able to pay the tax.

Typically, only a small number of taxpayers qualify for this program, and to get approved, you need to complete the application carefully and correctly. To learn more and to get help applying, contact a Louisiana tax professional today.

How to Apply for a Louisiana Offer in Compromise

To apply for an offer in compromise, individuals must complete Form R-20223 (Statement of Financial Condition for Individuals). Corporations, trusts, and estates should use Form R-20222 (Statement of Financial Condition for Businesses). Sole proprietorships and partnerships should submit both forms.

If you're applying based on doubt as to collectability, you also need to include all of the documents listed on Form R-20211 (Document Checklist for Offer in Compromise Based on Serious Doubt as to Collectability).

You can find all of these forms plus instructions in the Louisiana Department of Revenue: Offer in Compromise Program booklet. If you have applied for an IRS offer in compromise in the last three months, you can send that form to the LDR instead of the state forms. `

How to Fill Out the LA OIC Application

When filling out the offer-in-compromise application, you must include your name, business name, contact details, type of delinquent taxes, and the amount due. Then, you must make an offer and explain why you are requesting an offer in compromise.

Again, you can request an offer in compromise for the following two reasons:

• Doubt as to collectibility — you can't afford to pay the tax.
• Doubt as to liability — you don't believe you owe the tax.

Regardless of the reason you choose, you must write out a detailed explanation. Note that you cannot apply based on doubt as to liability if the tax has already been judged as final by a court or the Louisiana Board of Tax Appeals LaBTA. If you apply based on doubt as to collectibility, you must include detailed financial information about yourself and/or your business as well as a long list of financial documents with your application.

Finally, you must sign a document certifying that you understand the terms of the OIC program. Your signature also allows the LDR to pull your credit report and request financial documents from your bank or the IRS.

How Much Should You Offer When Trying to Settle LA Taxes?

The perfect offer is the lowest amount that is likely to be accepted by the state. But determining this number is tricky. To narrow in on the optimal offer, you need to understand what the LDR considers when assessing your offer.

To determine whether or not to accept your offer, the LDR looks closely at the details in your financial statement. If the state believes that your offer represents the most the state is likely to be able to collect, the LDR will accept your offer. If the state believes that you can pay more, your offer will be rejected.

This is why it can be critical to work with a tax professional. They understand exactly what the state is looking for. They can help you present your financial details and your offer in the most advantageous way possible.

Application Fees and Down Payments for the LA OIC

As of 2022, you must include a $186 application fee plus a down payment of 20% of the offer.

For instance, if you offer to pay $10,000, you must send $2,186 with your OIC application. That is 20% of the offer plus the application fee.

Financial Documents to Include with Your OIC Application

When you submit the OIC application to the LDR, make sure you include the following supporting documents:

• Federal tax return for the last two years.
• Bank statements for the last six months.
• Statements for retirement accounts and pensions for the past six months.
• List of securities you own and their market value.
• Life insurance policy statements.
• List of all items in safe deposit boxes.
• Statements for loans and lines of credit.
• Copies of all judgments from the last six years.
• Proof of employment or other income for taxpayer and spouse
• Denials of loan requests by two or more financial institutions.

What to Expect When You Apply for a LA OIC

When you apply for an offer in compromise, interest and penalties will continue to accrue on your account. If you are in a payment plan, the LDR expects you to continue making payments as usual. State tax liens will stay in place until your offer is accepted and paid in full.

If the LDR seizes your federal or state tax refunds, those amounts will not be included in your offer. Similarly, any amounts collected by the LDR while the offer is pending will not be included.

Here's a quick example. Imagine that you owe $20,000 in LA taxes. You offer $10,000 to settle your tax bill. While reviewing your OIC application, the LDR intercepts an IRS tax refund for $1500 and garnishes your $1000 of your wages. Those payments reduce your tax liability to $17,500, but they don't affect your offer. If the LDR accepts your offer, you still pay the full $10,000.

What Happens if the LDR Rejects Your Offer in Compromise

If the LDR rejects your offer, the tax liability is due in full, and the state has the right to start collection actions on your account. Your down payment will not be refunded. It will be applied to your account.

The LDR may reject your OIC application if any of the following apply:

• You're under criminal investigation or pending prosecution.
• You're filing bankruptcy.
• The application was missing details.
• The application didn't have the right signatures.
• Your offer was zero.
• Your offer includes an amount already collected.
• You have used the OIC program in the last 10 years.
• You didn't include all of the required financial statements.
• You forgot to include the power-of-attorney (POA) form if required.
• You didn't include the application fee or the down payment on the offer.
• Your offer is less than the LDR believes it will be able to collect on the tax liability.

You cannot appeal a rejected offer. To improve your chances of approval, you need to ensure you fill out your application carefully, and you may want to work with a tax pro.

What Happens If the LDR Accepts Your OIC Application

The LDR will notify you by mail if your offer is accepted. You must pay off the remaining balance by the date specified in the letter. If you fail to make the payment or if your check bounces, the state will void your OIC agreement.

A LA OIC gives you a fresh start. The state expects you to stay compliant with filing obligations after this date. If you fail to file a return or pay a tax owed in the next 10 years, the state can void your offer and demand full payment.

Contact a Louisiana Tax Pro for Help Today

An offer in compromise can help you save money on your state tax bill, but it isn't the right solution for everyone. To get help identifying the best resolution method for your LA state taxes, you need a tax professional experienced working with the LDR. Check out this list of LA tax pros in your area and get help today.
 

LA State Tax Payment Plan: How to Apply for an Installment Agreement

The Louisiana Department of Revenue (LDR) may be able willing to let you make payments if you cannot afford to pay your tax liability in a lump sum. LDR offers payment plans for both individual and business taxpayers.

To help you decide if an installment agreement is right for your situation, here is an overview of the rules and the application process.

Payment Plan Terms

Individuals can request payment plans ranging from six to 36 months. If you can pay off your tax liability in less than six months, you don't need to apply for a payment plan. Taxpayers who need longer than 36 months should contact a tax professional to talk about alternative options.

The state allows businesses to request payment plans on employer withholding tax, sales and use tax, corporate income tax, corporate franchise tax, and other business taxes. The installment agreement application for businesses does not specify a time limit for payment plans.

Application Fees for LA Tax Payment Plans

The application fee for payment plans on individual income tax is $105. You don't have to pay the fee if your adjusted gross income (AGI) is less than $25,000.

If the LDR accepts your request for a payment plan, the $105 will be applied to your tax bill. If the state denies your request, you will not get the $105 back.

Businesses also must pay a $105 application fee. This amount is non-refundable and will not be applied to your tax bill.

Down payment on Louisiana Payment Plans

The state requires individuals to make a 20% down payment when they apply for a payment plan. For instance, if you owe $10,000, you should send a $2,000 down payment with your application.

The LDR encourages businesses to remit a 20% down payment, but it is not always required. If you are applying for a payment plan on LA business taxes, you may be able to get approved without making a down payment.

Who Should Apply for a Payment Plan?

If the following statements apply to your situation, you may want to apply for a payment plan on your LA back taxes:

• You agree with the tax bill.
• You cannot afford to pay the tax bill in full in the next six months.
• You can afford to make monthly payments.
• You are unlikely to qualify for other resolution options such as reducing your tax bill through an offer in compromise or innocent spouse relief.

When you apply for a payment plan, you are agreeing with the tax due. Once you apply, you lose the right to dispute the tax or ask for a refund of your payments.

What to Expect When You Have a Payment Plan in Louisiana

When you have a payment plan, your payments will be automatically debited from your bank account. Individuals must pay monthly, but businesses can make weekly, bi-weekly, or monthly payments.

While making payments, you may still receive billing notices from the LDR. Interest and penalties will continue to accrue on your account, and the state may also place a lien on your assets. The LDR will also take your federal and state tax refunds and apply them to your balance due.

The state expects you to stay compliant with filing and payment obligations. If you don't file your state tax returns or if you miss tax payments, your payment plan may go into default.

What Happens If You Miss a Payment?

If you miss a payment, your LA installment agreement will go into default. The balance will be due immediately, and the state has the right to start collection actions including wage garnishments and asset seizures.

You have 60 days to request a reinstatement of your payment plan, but there is a $60 fee.

How to Apply for a Payment Plan in Louisiana

To apply for a payment plan on LA back taxes, individuals can apply online or by mailing Form R-19026 (Installment Request for Individual Income Tax) to the LDR.

Businesses can apply online or they can mail or email Form R-19027 (Installment Request for Business Tax) to the LDR. To apply for a payment plan over email, send the paperwork to Business.Tax@LA.GOV.

Both the individual and business applications are relatively short and straightforward. Individuals must note their contact details, tax owed, and gross wages. Businesses need to note all of their tax account numbers and the amount due for each type of tax.

To authorize direct debit, you need to include your bank account details and attach a voided check to your application. Your application will not be approved without these details.

In some cases, the LDR may want additional information about your financial situation. Make sure to respond to these requests promptly or your application may be rejected.

Get Help With Louisiana Back Taxes

If you have unfiled returns, unpaid tax liabilities, or other issues with the Louisiana Department of Revenue, a tax pro can help you. At TaxCure, we provide you a means to find local tax professionals who have experience working with the LDR, and when you search on our site, you can look at each professional's experience and ratings to ensure they meet your needs.

Don't let tax issues stress you out. Instead, get help finding the best resolution option for your situation — contact an LA tax pro today to talk about payment plans and other options for LA back taxes.

How to Qualify for a Mortgage With Unfiled Tax Returns

Most lenders won't give you a mortgage if you have unfiled tax returns, but it can be possible if you work with an alternative lender. Generally, the best option is to file your tax returns, set up payment plans on unpaid taxes, and get tax liens removed before you start the loan process. To help you out, this guide explains why most mortgage lenders require tax returns, options for getting a loan without tax returns, and what to do if you have unfiled returns and want to buy a home.

Key takeaways

• Mortgage lenders use tax returns to verify your income.
• You cannot get FHA, USDA, VA, or Fannie Mae/Freddy Mac loans without a tax return.
• Some alternative lenders may work with you – expect higher down payments and higher interest rates.
• For the best loan terms, file old tax returns before applying for a mortgage.
• Making installment payments on your tax debt will not stop you from getting a mortgage.

Why Mortgage Lenders Ask for Your Tax Return

A mortgage is the biggest loan most people will ever take out, and your lender needs to feel confident that you can repay this large sum of money. To learn about your financial situation, the lender looks at your proof of income, tax returns for the last year or two, credit report, and other financial documents. 

You may send your tax returns directly to the lender, or they may use the Income Verification Express Service to get your information from the IRS. If you cannot provide this information, most lenders won't approve your mortgage application.

Underwriting Rules for for Most Mortgages

The majority (70%) of mortgage loans in the United States are underwritten by Fannie Mae or Freddie Mac. You must provide a tax return to obtain either of these loans, but if you apply between April and October, you may be able to use last year's tax return as long as you have proof that you filed an extension and paid any estimated quarterly tax for the year. The Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), and the Department of Veteran Affairs (VA) offer government-backed loans with looser financial standards than conventional mortgages, but these loans also require tax returns. 

Mortgages You Can Get Without a Tax Return

A very small handful of lenders may be willing to give you a no-tax-return mortgage which is sometimes referred to as a no-doc or low-doc mortgage. They generally fall into the following two categories:

Institutional No Tax Return Mortgage Lenders – These lenders take a close look at your income documents and your bank account statements. Because they work with high-risk clients, they typically charge higher interest rates than other lenders. If you get a no-tax-return mortgage, you should expect to pay 10 to 20% or more as a down payment. 

Asset-Based Mortgages – If you have a lot of near-liquid assets (low-risk stocks, bonds, etc), you may be able to get a mortgage based on the value of your assets. These loans are sometimes called asset depletion loans. The loan is set up as if your annual income is the total of your assets divided by the term of the loan. For example, if you have $1 million, that equates to $50,000 per year over a 20-year loan.

Owner-Carry Mortgage Lenders – This is when you make payments directly to the property owner. Because these loans are handled between individuals, they don't have the same stringent requirements as traditional mortgages. Owner-carry loans can be useful in some situations but risky or even predatory in others. Keep in mind that many owner-carry arrangements come with a balloon payment.

You make monthly payments for anywhere from a year to a decade. Then, you have to pay off the remaining value of the property in a lump sum called a balloon. To cover the balloon payment, you typically have to go to a traditional lender, and you may struggle to obtain a loan if you have unfiled returns. Consult with an attorney or realtor before taking out this type of loan.

What to Do If You Want a Mortgage and Have Unfiled Returns

If you're ready for homeownership but have unfiled returns, you can explore the options above, but they will likely cost you more money in the long run. The best option is to deal with your unfiled tax returns. 

• Gather your documents and do your tax returns – If you hire a tax pro, they will easily be able to get your income documents from the IRS to complete your tax return. If you are self-employed, however, you will need to dig into your bank statements, sales reports, and other financial documents to put together the numbers.
• Complete the last six years of returns – Regardless of how far behind you are, you generally only need to do the last six years to get compliant with the IRS, and the mortgage lender will typically want to see the last year or two.
• Request penalty relief – When you file your delinquent returns, you will incur penalties. Ask the IRS for penalty abatement to reduce the total amount you owe.
• Set up payment plans if you owe taxes – If your tax returns show tax due, make sure to set up a payment plan as soon as possible. The lender will consider your monthly tax payments along with any other debt payments when looking at your debt-to-income ratio.
• Address tax liens – If the IRS has issued a tax lien against you, ask them to remove it. If you owe less than $50,000, they will generally remove tax liens once you make three monthly payments on an installment agreement. If you owe over $50,000, you may need to get the lien subordinated before you can get a mortgage.
• Work on your credit score – While dealing with your unfiled tax returns, also take steps to improve your credit score. Pay down credit card debt and contact the credit bureaus if there are any mistakes on your report. The higher your score, the better your loan terms will be.
• Save up a downpayment – A big downpayment can help improve your chances of success, but if that's not possible, stick with FHA, USDA, or VA loans which all have low downpayment requirements.

Remember in some cases, filing old tax returns can put money into your pocket. If you have a refund, you can claim that three years after the filing due date. That can help you with your downpayment and also offset taxes you may owe for other years.

Can You Obtain a Mortgage If You Have Unpaid Taxes?

If you file your returns and owe tax, that won't necessarily prevent you from qualifying for a mortgage. However, your mortgage lender will want to see proof of your payment arrangement, and they will take these payments into account when calculating your debt-to-income (DTI) ratio. The DTI requirements vary from lender to lender, but typically, you should aim for 36% or below. That means that 36% of your monthly income goes toward debts including your tax repayments, student loans, car loans, your mortgage, and any other debts you have.

Most mortgage lenders want to see that you've been making payments for a few months. If you're in the first or second month of your installment agreement, you may want to wait a bit before applying. Don't be afraid to ask the loan officer about your situation — they deal with all kinds of borrowers, and they can give you advice on what to expect during the home-buying process if you have unpaid taxes.

Applying for Mortgages When You Have a Tax Lien

The IRS can also place a lien on your assets if you have unfiled returns. When you don't file your returns, the agency can assess how much you might owe and send you a bill. Usually, this bill is more than you actually owe, and if you don't respond, the IRS can issue a tax lien. Sometimes, even if you set up a payment arrangement, the IRS will still place a lien on your assets.

A lien is the government's legal claim to your assets. If you sell assets while a lien is in place, the government has the right to take the proceeds of the sale. For best results, you should work with a tax pro to get the lien removed. If the IRS refuses to remove the lien, you may need to get it subordinated. By subordinating the lien, the IRS agrees that your mortgage lender has priority if your property ever goes into foreclosure.

Get Help Applying for a Mortgage When You Have Unfiled Returns

If you have unfiled returns, unpaid taxes, or a tax lien, homeownership can still be possible, but you will need to jump through a few extra hoops before you sign the mortgage and get your new home. For best results, you should contact a tax pro to help you. They can help you file returns, set up payment plans, or deal with tax liens so that you can confidently apply for a mortgage. 

Don't let tax issues stop you from becoming a homeowner. Instead, get help today. Search our directory to find a tax pro in your local area who is experienced with these issues. You can use the search box below.

Louisiana: Consequences and Resolution Options for Back Taxes

The Louisiana Department of Revenue (LDR) collects income tax, sales tax, and other personal and business taxes in this state. If you owe back taxes, the LDR has the right to forcibly collect the amount due using wage garnishments, bank account levies, and assets seizures.

Contact the Louisiana Department of Revenue:

• Individual Inquiries: 1-855-307-3893
• Business Inquiries: 1-855-307-3893
• Collections Number: 1-855-307-3893
• Website: https://revenue.louisiana.gov/

But this doesn't mean you need to be scared about your Louisiana tax bill — the agency is willing to work with taxpayers and offers a number of resolution options. Here's what you need to know if you owe delinquent taxes in Louisiana.

Resolution Options for Louisiana Back Taxes

If you owe back taxes in Louisiana, you may be able to set up one of the following arrangements with the state. The right option depends on your tax bill and your financial situation. A Louisiana tax pro can help you decide what to do.

Payment Plan

The Louisiana Department of Revenue offers payment plans to qualifying taxpayers. Payment plans let you pay your tax bill in monthly installments, and the LDR allows you to take up to 36 months to pay off your bill. Businesses may be able to take longer.

To apply, individuals should use Form R-19026 (Installment Request for Individual Income Tax) and businesses should be Form R-19027 Installment Request for Business Tax). If you have a LaTAP online account, you can request a payment plan online. You can request more about Louisiana's state tax payment plan option here. 

Offer in Compromise

If you are unable to pay your tax bill in full, the state may be willing to settle for less than you owe. Typically, this option is only available if the state believes that your offer represents the most amount of money it is likely to be able to collect on your tax bill. You can read more details about Louisiana's State Offer in Compromise option here. 

To apply for an offer in compromise, individuals should use Form R-202121 (Offer in Compromise Application) and businesses should submit Form R-20212B (Statement of Financial Condition for Businesses).

Innocent Spouse Relief

You may qualify for innocent spouse relief under Louisiana Revised Statute 47.1584 if your spouse or ex-spouse was exclusively responsible for the tax liability. To get innocent spouse relief on Louisiana taxes, you must not have known and had no reason to know that your spouse failed to file a return or failed to pay tax. Or, you must have been physically or mentally coerced into silence.

Typically, you have to apply for innocent spouse relief within two years of the start of the collection actions. But if you apply after that window, you may still be able to get innocent spouse relief if the state feels that it would be unfair to hold you responsible.

Hardship Status

If you're experiencing financial hardship due to your Louisiana tax bill, the state encourages you to apply for an offer in compromise. The IRS has a hardship program (also called currently not collectible) where the agency will pause collection actions if you prove that you cannot afford to pay. Louisiana does not advertise a similar program.

Penalty Abatement

If the LDR has added penalties to your account, you can apply for a penalty waiver online using Form R-20128 Electronic Submission. Before applying, you must file all delinquent returns and pay all your state back taxes, interest, and penalties not included in the waiver request. The state will not waive penalties if you are behind on filing or payment obligations.

Interest Waivers

In very rare situations such as when the state caused an error or delay, the LA DOR may be willing to waive interest. You can request the state to waive the interest on your account using Form R-20130 (Request for Compromise of Interest).

Appeals Process

You have the right to appeal if you disagree with a Louisiana tax assessment. To apply, you should write out a petition explaining why you disagree with the assessment and outlining what kind of relief you want. Then, you should send it to the Louisiana Board of Tax Appeals (LaBTA).

Most appeals can be resolved without a hearing, but in some cases, you may have to attend a hearing with the LaBTA in person or over the phone. You have the right to represent yourself, but due to the complex nature of Louisiana tax laws, you may want to work with a tax attorney. Note that you must appeal by the date on your notice or you may lose your chance to appeal.

Consequences of Unpaid Louisiana Taxes

The LA DOR can use numerous tactics to collect unpaid taxes. If you want to avoid collection actions, you need to be proactive about negotiating an arrangement for your unpaid taxes. The sooner you contact the state, the better. Here's what can happen if you have delinquent taxes in Louisiana.

State Tax Liens

If you have unpaid LA taxes, the state can issue tax liens in any parish where you own real or personal property. A lien means that the lienholder has a right to the proceeds if you sell the asset. Liens can make it hard to sell or transfer assets, and they can also impair your ability to get a loan.

The state will only release the lien if you pay the tax in full, and the state will add the cost of recording the lien to your tax bill. To get a pay-off amount and request a lien release, file Form R-19023 (Request for Louisiana Tax Assessment & Lien Payoff). Generally, the state takes four to five business days to respond to the request for a payoff amount. If you need information faster, you can fax your request to the Special Collection Unit at (225) 219-2256.

In some cases, the LDR may place liens on multiple properties. If some of these properties cover the full amount of your tax liability, you can request a partial lien release to have the state remove excess liens from your other properties. The LaBTA must approve these requests.

Tax Levy

The LDR has the right to seize stocks, securities, bank accounts, wages, real estate, and all other types of property if you have unpaid tax liabilities, penalties, or interest. Generally, the state only takes wages and bank accounts, but it has the right to take nearly all of your personal or real property.

If the state garnishes your wages, it can take up to 25% of your pay. Typically bank account seizures are for the full amount in your account, up to the amount owed.

Tax Penalties Charged

The LDR assesses penalties and interest if you file or pay your taxes late. If you file your return late, Louisiana assesses a failure-to-file penalty of 5% of the balance due. This penalty applies immediately, and another 5% penalty applies every additional month, up to a maximum penalty of 25%.

The state also assesses a failure-to-pay penalty. For individual income tax, the penalty is 0.5% of the tax due every month, up to 25%. For all other taxes, the late-payment penalty is 5% of the amount due every month, up to 25%.

As you can see, the failure-to-file penalty is much higher than the failure-to-pay penalty on individual taxes. To minimize your penalties as much as possible, you should always file your return on time or as close to on time as possible, even if you cannot afford to pay the tax due.

Note that requesting an extension only extends the amount of time you have to file. It does not extend the due date for your tax return.

Interest on Louisiana Back Taxes

As of 2022, the interest rate on unpaid Louisiana state taxes is 0.5417% per month or 6.5% per year. The rate adjusts annually.

Seizing State and Federal Tax Refunds

When you owe back taxes to Louisiana, the state can take your IRS tax refunds through the federal offset program. Similarly, if you owe federal back taxes, the Louisiana Department of Revenue will send your state refund to the IRS.

Refusing to Let You Have a Driver's License

The State of Louisiana may revoke, refuse to issue, or deny the renewal of your driver's license if you owe more than $1,000 in state taxes. To get your driver's license back, you must pay the tax due or set up a payment plan. If you have not filed the return related to the tax due, you also must file the return.

Once you meet the requirements, the state will send you a clearance letter. To get your license back, take the letter and a $60 reinstatement fee to the Department of Public Safety.

Taking Your Hunting License

If you owe more than $500 in Louisiana taxes, penalties, and interest, the state also has the right to take your hunting licenses. When you go to apply for a hunting license, the state will reject your application if you have a final determination for more than $500 in unpaid state taxes.

Get Help With Unpaid Taxes in Louisiana

The state of Louisiana has a lot of power to collect unpaid taxes, and even if you only owe $1,000, you risk losing your driver's license and facing other serious collection actions.

To protect your assets, you should work with a tax professional who is experienced in dealing with the LDR. They can look at your situation, help you identify the best resolution option, and negotiate with the LDR on your behalf. To get help, search for a LA state tax pro using TaxCure today.

Tennessee Department of Revenue: Offer in Compromise

An offer in compromise is when the Tennessee Department of Revenue (TDR) lets you pay off your tax liability for less than you owe. 

The TDR typically only accepts offers if it believes they represent the most money the agency will be able to collect over the next three to five years, and offers tend to be the most successful when the taxpayer shows a good faith effort to pay the tax liability and adjust their lifestyle to stay on top of future tax bills. 

To help you understand the process, this guide explains how to apply for an offer in compromise in Tennessee and what to expect as you wait for your offer to be reviewed. 

Qualifications for an Offer in Compromise in Tennessee

To qualify for an offer in compromise in Tennessee, you must meet the following conditions:

• Not involved in an open or active bankruptcy case.
• Filed all required tax returns and reports.
• Fully completed the offer-in-compromise application.
• Provided all supporting documents.
• Responded to all requests for additional information.

The TDR looks at each application individually, but it pays close attention to your ability to repay the tax liability now and in the future. In addition to looking at your income, expenses, assets, and liabilities, the agency also considers the potential for change and your likelihood of complying with tax laws in the future. 

How to Apply for an Offer in Compromise in Tennessee

To apply, you need to fill out the Offer-in-Compromise Application and submit it to the TDR. The application is 25 pages long, but it includes detailed instructions and everything you need to disclose your personal or business financial situation fully. 

Individuals must include Form CS-14B (Statement of Financial Condition for Individuals), while businesses should use Form CS-14C (Statement of Financial Condition for Businesses). Self-employed people and business owners must submit both of these forms.

How to Structure Your Offer in Compromise

The offer-in-compromise application requires you to note how much you are offering to settle your tax liability. Here are your options:

• Make an offer and include payment for the full offer
• Make an offer, include a downpayment, and agree to pay off the balance in 30 days.
• Make an offer and agree to make monthly payments of a certain amount over a three to five-year time frame.

If you include a payment, the state will keep the payment even if it doesn't accept your offer. 

How Much to Offer for a Tax Settlement in Tennessee

So, how much should you offer to settle your tax bill? Tennessee applies a very straightforward formula to offers in compromise for both businesses and individuals, and you can use this formula to guide you to an offer. After taxes, the state takes your monthly disposable income, multiplies it by 60, and adds that amount to your total equity. 

Here's an example. Imagine you have $200 per month left over after expenses, and you have $5,000 in equity. When you multiply $200 times 60, you get $12,000, and adding $5,000 brings you to $17,000. In this case, the TDR assumes that it can collect $17,000 over the next five years, and it may not accept an offer below this amount.

It's important to note that the TDR may not take all your expenses into account. If you send in an application that shows you have just $100 in disposable income per month, the state may decide that some of your expenses aren't valid, and it may claim that you have more disposable income every month.

Information Required on the Offer-in-Compromise Application

When making an offer in compromise, you must include your personal or business tax numbers and contact info, monthly income or revenue, monthly expenses, assets, liabilities, and dependents. 

You also must note if you have made an offer of compromise to the Internal Revenue Service (IRS) and answer questions about the following:

• If you have disposed of assets in the last 18 months.
• If there are foreclosure proceedings on any real estate you own.
• If anyone is holding assets for you.
• If you're a party to a pending lawsuit.
• If you're likely to receive an inheritance in the next four years.
• If you've asked for an offer in compromise in the past.
• If you or your business are currently in bankruptcy.
• For business-related taxes, if the business has been discontinued.

Documents to Include With Your Offer in Compromise

When you make an offer in compromise in Tennessee, you need to include the following supporting documents with your application:

• Income tax returns for the last two years.
• Bank statements from all accounts.
• Credit and merchant card statements.
• Utility bills.
• Insurance statements.
• Life insurance statements with details about cash value, accumulated dividends, interest, and loans against proceeds.
• Statements from retirement accounts, investments, pensions, etc.
• Current credit report.
• Proof of employment.
• List of all assets.
• Accounts receivables for your business with the payor, account status, and account age.
• Profit and loss statement for your business for the last six months.
• List of all liens and judgments against you and your business.
• Statement of all IRS tax bills and proof of payment plans.

You also need to make a statement explaining how you incurred the tax liability and why you need a compromise. 

For example, if your rent or mortgage is $2,000, that exceeds the amount allowed for a single person, and if you want the TDR to consider this amount rather than the standard housing allowance, you need to explain in detail why this is a reasonable expense in your situation. 

What Happens While TDR Reviews the Offer?

Submitting an offer in compromise does not stop the collection activity on your account, and if you're making installment payments, it doesn't change the terms of your payment plan. If you want to stop collection activities, you may want to set up a short-term Installment Payment Agreement (IPA) while the TDR reviews your offer, but even if you set up a payment plan, the TDR can still file a state tax lien. 

Making an offer in compromise does not change the deadline for requesting an informal conference or filing a suit to challenge a proposed tax assessment. If you disagree with a proposed assessment, you still need to request an informal conference or submit a suit by the deadline noted on the assessment. 

Tennessee Offer-in-Compromise Review Process

The Collection Services Division consults with legal counsel to decide if your offer is in the state’s best interest. Then, it makes a recommendation of acceptance or denial. The Commissioner of Revenue makes the final decision on most offers, but the Attorney General and Reporter and the Comptroller of the Treasury must approve some offers.

The TDR will notify you by mail if your offer has been recommended for approval or rejection, and then it will also let you know when the final decision has been made. 

What Happens If Your Offer Is Accepted?

If your offer is accepted, you must pay the balance of the settlement as outlined in your offer. You must also stay compliant with tax reporting, filing, and payment obligations for the next five years, or your compromise will be voided, and you will owe the full amount. If a state tax lien has been filed against you, the DOR will release the lien once you have satisfied the terms of your offer — the release shows that you no longer owe the tax and the lien is no longer attached to your assets, but the record of the lien may still continue to exist.

What Happens If Your Offer Is Rejected?

If the TDR rejects your offer in compromise, the TDR will typically offer you a payment plan, and although you cannot contest the rejection, you can suggest an alternative payment plan. 

Common reasons for rejecting offers in compromise include the following:

• The TDR believes you can pay more.
• You have omitted serious information from the application.
• You have a history of non-compliance or fraud.
• The tax is based on amounts you collected from customers and never remitted to the government — for instance, state sales tax.

Tennessee Offer in Compromise Based on Legal Argument

An offer in compromise based on a legal argument applies when you request an offer in compromise because you believe that you do not legally owe the taxes. In this situation, you need to submit a written statement about your legal argument, but you do not need to fill out the application or provide financial disclosure. 

Get Help Applying for an Offer in Compromise in Tennessee

Applying for an offer in compromise can be a tricky process, and for best results, you need to include the right information and detailed explanations about your situation. Ideally, you should work with a tax professional who understands how this state handles the process.

To get help with tax issues in Tennessee, contact a tax pro with experience negotiating with the TDR.