How to file prior year's form 114? Can you file with the Amended return?

[skyworks]

Hi,
My new client recently got IRS notice with penality and tax due resulting from 2021 unreported 1099 k income (the return done by the client themself). Per IRS instruction, not required but it is allowed to attach the amended return (recalculate the cost associated with the 1099k income), I can handel this part.

Further look I found they have a couple of foreign bank accounts the total amount >$10k, they never heard the FBAR request so never reported.

So I am wondering if I am able to file for 114 along with the amended return for 2021?

Or how should we handel the missing 114 forms for all the 6  years from 2022 and prior all the way back?

Any suggestions will appreciated.

[itonewbie]

This may help...

https://accountants.intuit.com/community/proconnect-tax-discussions/discussion/re-fbar/01/109575/hig...

[itonewbie]

I was going to say that you should consider whether your client should participate in the streamlined procedures to limit his/her exposure.  But seeing that your client already received a notice, I think your client may no longer be eligible since even a CP-2000, which is processed as an AUR, is still considered an examination.

Before you file the amended returns and FBAR's, you may like to take a deeper dive with your client why these accounts are being maintained (since domestic taxpayers with no overseas dealings don't tend to have these accounts), which could help unearth whether there are other offshore arrangements or transactions you may not be aware of, especially if the balances fluctuates quite a bit.  You may find that your client has (or had) other accounts such as pensions from previous employers, etc.

I'd tread carefully with this one.

[skyworks]

thanks, good point if CP-2000 processed as an AUR. anyone had similar case?

We had called IRS FBAR, they suggest to efile in BSA system for 6 each year (2022- to 2017) with an explanation of reason not to filing. The taxpayer lost job, had family member passed away during 2021. 

The two foreign bank accounts, one is checking they use when back to the country, The other was an investment account before they immigrate to USA, not many activities.

Will pick up the interest or capital gain if any stock sold on the associated years.

[itonewbie]

Discretionary filing of FBAR on FinCEN for older returns would be the way to go but including any kind of statement with the filing would not help mitigate the penalty exposure.

Particularly with the investment account, watch out for PFIC, as that will be another can of worms.