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Yeah but tell me am I going to get a 6 figure fine and/or jail time as stated in the OP if I don't file this form?
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Last week I listened to an IRS/Treasury Department conference call on foreign bank account reporting. The penalties are:
willful violation: the
larger of $100,000 or 50% of the money in the foreign account(s);
non-willful violation: fines of up to $10,000 per account
Willful violators also
can be criminally prosecuted (possible felony jail time).
Now, is someone like Curtains likely to face criminal prosecution? Of course not. But since he does know about the law, not filing the TD F 90-22.1 would be, for him, a willful violation. (And, based on the conference call, the Dept. of the Treasury would consider anyone with "large sums" in foreign account(s) who doesn't complete the FBAR requirements to be willfully violating the law.)
Also, everyone who has to complete Form TD F 90-22.1 must also check a box on Schedule B of Form 1040.
Now, given that the IRS will likely have access to all of the Neteller information within a few months, anyone who had $10,000 or more at Neteller at any time during 2006 who doesn't complete the FBAR forms is taking a huge gamble. It's almost certain that the Treasury Dept. will choose one "lucky" taxpayer to criminally prosecute. The IRS & Treasury consider online gambling to be
"an abusive offshore tax avoidance scheme;" prosecuting someone would have (in their view) a deterrence impact. It's a lottery that you don't want to win.
-- Russ Fox