Avoiding Hefty FBAR Penalties and Fines - 4 Levels of FBAR Fines By Curt Matsen

In this article I will focus on the FBAR penalties and fines that can be levied for non compliance and how to avoid them.
If there is one thing you want to avoid in your financial life it is to avoid taking any of Uncle Sam's money. The IRS wants their share of your money and they are not kidding when they say that. There are some crazy hefty fines and penalties for those that don't comply with the FBAR regulations. These include monetary fines and penalties that include jail time.
So although the authority over the FBAR is the US Secretary's office, it has delegated authority to the IRS as well to enforce FBAR compliance. Why? Because failure to disclose all foreign financial activity hurts the IRS. Income not reported is not taxed, therefore less tax revenue for Uncle Sam. So now that you know that the IRS can levy FBAR penalties and fines on you, it is best to fully comply with the FBAR reporting guidelines to avoid such instances.
Historically, individuals and entities that did not comply with foreign bank account reporting requirements were threatened with criminal and civil prosecution. However the actual cases of prosecution were far and few between. This trend will reverse now that the FBAR regulations are more concrete, better defined and regulated.

This is particularly true in light of the September 2001 events in the United States, which gave both to the United States Patriot Act of 2011 that requires the US Treasury Department to evaluate and suggest to the US Congress ways to improve compliance with FBAR requirements. This was around the same time that the Offshore Voluntary Compliance Initiative program (OVCI) which gave FBAR amnesty to those not in compliance with the standards had also expired.
Consulting Professionals to Avoid FBAR Penalties
Many who face FBAR penalties can usually avoid it by consulting professionals such as licensed tax accountants and attorneys. Unfortunately, many individuals and entities open offshore bank accounts without such consultation.
For many of them it is not their fault as they are not aware of what the law is, but like I said earlier not being aware of the law is never an excuse for not complying with it. Many don't think much of opening foreign bank accounts, and while opening an offshore bank account itself is not an issue, individuals and entities who have done so must disclose the activity on an annual basis according to the law.

Again, FBAR penalties can be quite severe. That is why it is increasingly important that you consult with a licensed professional if you are contemplating offshore banking or getting involved in any type of foreign financial account or activity. If you do so, make sure you are aware of the FBAR form reporting requirements.
Severity of FBAR Penalties
Violation of any law can come with hefty fines and penalties. FBAR compliance is no different. If you do not disclose your foreign bank account activity on the proper forms by the deadline each and every year, you may be prosecuted by the IRS in civil or criminal court. Yes, you can face criminal penalties for issues such as tax evasion and money laundering.
If you are prosecuted in a civil case, you may be looking at a penalty over $25,000 USD or the balance you have in your foreign account (if that is greater), up to a maximum of $100,000 per violation. And here is the kick in the pants. You can be subject to criminal penalties even after being convicted in the civil case. The statute of limitations is also quite long, six years in this case. That is the time period within which the US Secretary can decide to bring a civil suit against you. If you are convicted, you have a maximum of two years to pay the monetary fines.
Now that is actually the lighter side of the matter. FBAR penalties if convicted for a criminal violation can be well over $250,000. Alternatively, the government can lock you up for up to 5 years in jail, or both to make matters worse. Now if you are deemed to have purposely done something illegal, then you can face fines up to HALF A MILLION DOLLARS! And 10 years in jail, or both. Surprisingly however, in a criminal FBAR case, the statute of limitations is only 5 years as opposed to in a civil case. This means that you can be convicted up to 5 years after you have committed the violation.

FBAR Non Compliance Conviction Procedures and Guidelines
The authorities must first file a civil suit against one for non compliance. During this time, authorities will attempt to recover FBAR penalties charged to the individual or entity. The individual or entity doesn't have to accept the charges and can contest the FBAR penalties at this stage of the process.
The specific Federal guidelines that govern this law can be found under 31 U.S.C. 5322(a); Federal Sentencing Guideline §2S1.3. Guideline §2S1.3 (b) (2) offers potential reduction of the FBAR penalties through lowering the severity of the offence if the individual or entity can prove that it acted with no reckless disregard while not complying with the law. Also, there are specialty FBAR amnesty programs that are periodically sponsored to encourage compliance.
Calculation FBAR Penalties
Here is how an FBAR penalty is calculated. There are four FBAR penalty levels, which are detailed out in the Federal guidelines mentioned above.

• Level 1 - pertains to non disclosure of accounts with aggregate balances under $20,000 USD.
• Level 2 - pertains to non disclosure of accounts with aggregate balances under $250,000 USD.
• Level 3 - pertains to non disclosure of accounts with aggregate balances over $250,000 USD but under $1 Million USD.
• Level 4 - pertains to non disclosure of accounts with aggregate balances over $1 Million USD.

Curt Matsen, CPA is the author of the FBAR Filing Guide, a comprehensive resource that discusses FBAR form requirements, how to avoid fines and penalties as well as the periodic FBAR amnesty programs sponsored by governments to encourage voluntary compliance. Read more at: http://www.file-fbar.com

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Why You Should Be Investing in Gold Now By Chad Upton

Most investors split the money over some kind of mix of stocks and bonds. They usually intend that the stocks will be a portion of their money that is expected to grow, while the bonds produce slower growth but, by comparison to stocks, are virtually guaranteed to maintain and increase their value. While these categories of investments have their place in a portfolio, too many people are overlooking the potential benefits of Investing In Gold.
Gold is a metal that has been precious to humans for as long as history has been recorded. A Gold Investment, therefore, is basically guaranteed to always have some value. While a company can declare bankruptcy or a municipality can potentially default on its bonds, gold has had value to people for thousands of years and there is absolutely no reason to believe that this is going to change. In fact, the value of a given quantity of gold more than doubled between 2005 and 2010. This made Buying Gold not only a very secure investment, but one that outperformed the vast majority of the stocks available on the market!

Most of the main financial benefits is that gold is not impacted by a company's profits or lack thereof. When you're dealing with stocks, many times these shares can have huge shifts in value simply because a company performed better or performed worse than was believed. This can wreak mayhem on the value of your total investment portfolio, especially if your portfolio is heavy on stocks.
Potential investors should take the time to learn about the option of a Gold IRA or 401k. Essentially, the government allows for people to invest in gold through their tax-advantaged retirement accounts. In this case, the individual does not end up being in possession of the physical gold. Instead, for so long as it is part of the retirement account, it must be held by a depository that is approved by the IRS. Once a person reaches retirement age and is taking withdrawals from their accounts, of course, they are free to either have the physical gold shipped to them or to have it sold on their behalf.

Investing In Gold is a great way to add additional diversification in a very secure form to a retirement account. Anyone who is concerned about being sure that some of the money that they are putting aside for their retirement is not at risk of being completely lost can benefit from getting an account that permits them to hold this asset.

Chad Upton has been staying up to date with Gold Investments for the last 5 years and has partnered with some of the best firms to help his customers see the best financial success.

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Small Business Management Through the Recession By Carrie H Johnson

Today's uncertain economy is enough to make a small business owner's hair fall out, bowl over from a stomach ulcer or scratch up a rash that could cause customers to consider another place for service or product. The good news is that we know the economy will turn around, in time. Your job is to work smarter and keep your business moving forward until then. That means taking a hard look at the business of your business.
As small business owners we are good at what we do and make. Problems arise when we pay too much attention to our product or service and not enough to managing the business itself. Granted that is the part that usually evokes a dreaded "ugh," but it is also the part that can mean the difference between success and failure. Focusing on your financials, the people who make your business possible, and your vision will help ensure your survival in today's economy and beyond.
Re-Mind Your Business
Cash in or Cash Out I am sure you have heard this a thousand times, but it still needs saying. "Cash is king." A business is more likely to survive in a good or bad economy with good cash flow than with profits. One does not necessarily mean the other. Small business owners usually have problems with cash flow no matter the economy. To improve cash flow do a cost analysis of your business. Look at areas where you can save money such as bank and credit card charges; negotiate with creditors for longer payment arrangements. Barter for services or products with suppliers. If you offer credit to your customers, cut it down or out and be more aggressive with collections. Consider outsourcing services instead of hiring another employee. There are many freelancers that are experts in specific areas such as accounting and bookkeeping, website design and operations and marketing and public relations that can cost less than an employee, benefits included. Be creative in reducing the cost of your day-to-day operations without sacrificing the quality of your product or service.

If you do large jobs, ask for a payment plan that includes a deposit. If you do large contracts such as janitorial services for major corporations, invoice early and ask for early payment or offer your customers a discount if they pay the invoice within a certain time frame. In a poor economy, large corporations are looking for ways to save money too.
If you need help with your cost analysis or cash flow projections, ask for it. Worcester has many free and low-cost resources to help you develop your survival tactics.
Marketing
While cutting costs is most important, cutting back on marketing, advertising and public relations during a poor economy is a big mistake. Marketing and public relations are what gain you new business. When times are hardest is the time you want to shine even brighter than before. If you do not let your customers know you are still on board, they may forget about you when the good times resurface. And they will resurface.
Develop a no cost marketing plan that includes building media relationships so you can submit byline articles relevant to your industry. Appear on local access television as an expert in your field. Join in professional, community and industry networking events. Develop a customer management program that includes regular contact with customers about subject unrelated to your business as well.
Apply for small business awards and contests by corporations, professional associations, and government. This recognition will get you attention by your customers as well as potential customers that may not know you exist. Winning an award often gets you requests from other media who want to publish your story. It also builds your credibility.

Nurture Your People
Employees It may be that without your employees you would not have a business. During this economic slowdown, communicate with your employees. Now more than ever it is important to be transparent, ask for their ideas for improvement. Motivating employees is difficult when they are feeling shaky about whether they will keep their jobs. The best motivator is to provide them the opportunity to offer suggestion on how to serve the best interest of everyone in the company over the long-haul. They may be willing to take a pay cut or have ideas about cutting back on expenses you did not think about. Go the extra step and provide praise for good work or ideas that work. They are your most precious resource. It is usually less costly to keep current employees than searching for qualified employees that you have to train when the economy improves.
Customers Keeping your existing customers by providing excellent customer service is good practice anytime. During today's economy it is critical. It is much easier to keep existing customers than to find new ones. Talk to your customers. Learn what they need, how they are doing financially, what their expectations are for the future, so you are on your game when the economy improves and your customers start spending more.
Suppliers Supplier loyalty can be valuable when you need extra time to catch up on your account payables. Depending on your business, you may land a new account and need supplies to launch the account until your first month of receivables is due which could be 60 to 90 days out. A good relationship with your supplier could mean your payables receive the same time consideration. Think creatively when making deals to grow your business with the help of your suppliers. The more growth your business experiences, the more business your supplier could expect.

Focus on the Future
Business Plan Review and revise your business plan. As your business grows and your industry changes it is necessary to keep your business plan relevant. A well-thought out business plan that includes your cost analysis, new marketing plan and employee and customer management programs is critical to a quick and successful recovery. It can ensure the future viability of your business.

Carrie H Johnson is founder of three businesses including a cleaning service she started with no money and grew to a multimillion dollar contract-cleaning company that supported 165 employees. During her 17 years as President of this company she received several business and community awards.
She is the author of the book "From the Pits to the Palace: One Woman's Journey to Self-Realization through Entrepreneurship" released in March 2009 and available on Amazon and bbotw.com (Buy Books on the Web). She also is a journalist and has written for several newspapers including the Los Angeles Times, Worcester Telegram and Gazette and the Metrowest Daily News.
Ms. Johnson is a small business adviser specializing in business planning, public relations and marketing planning. She works closely with The Center for Women and Enterprise (CWE), a nonprofit organization whose mission is to empower women to be economically self-sufficient and prosperous through entrepreneurship.
She has served on several Board of Directors for organizations such as CWE, the New England Minority Supplier Development Council, Wayside Youth and Family Network, and the Boston Area Rape Crisis Center.
Ms. Johnson has a BA and MA in journalism from California State University, Los Angeles and Northeastern University in Boston, MA. http://www.carriehjohnson.com

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7 Critical Steps to Ignite Your Company's Cash Flow By Laurie Taylor

Starting a business is a cake walk compared to running a sustainable, profitable business. In the initial stages of getting your company up and running, you are on an adrenalin high.
Your passion and the excitement of doing something you had dreamed about for months or years, seeing that dream become a reality, can be intoxicating!
Sooner than later, however, the challenges of running a successful business hit and you find yourself struggling to balance all the demands a growing business requires.
Too many business owners direct their attention to driving sales into their business without a plan on how to manage the cash when it hits their bank account.
The frenzy of getting that next sale, managing the expectations of delivering the product or service, hiring the necessary staff to keep ahead of demand and putting in place the processes to create efficiencies are all consuming.
The reality is this. Managing your cash is your #1 job as a business owner.
A cash-strapped business will not grow. You as the owner will burn out. The company will go away. If you are worried about getting enough cash to run your business, here are 7 steps to consider early on in starting and running a business.
1. Improve sales - you have to spend money to make money
I'm amazed at how many small business owners find little difference in marketing and sales. Or while they may understand the fundamental difference, they make no plan to actually land sales. They believe that their passion for their product or service will carry the day. I've had many business owners tell me 'if I can get in front of someone, I can sell them my product." They rely on their personality not on an intentional sales plan. To ignite cash flow, a sales plan is critical. And selling everyday becomes a priority. If selling is not your strength, hire a sales coach. Do this before your cash becomes depleted to a point where you don't have the resources to apply to your business.

2. Have a plan - don't shoot from the hip
When did planning become a bad word in business? I've heard more than one expert negate the impact of planning. Certainly making a plan you can implement is a challenge. Too many business plans are filled with dreams of grandeur but have no chance of becoming reality. A plan has to be based on facts and the more facts you have as you build a business the better decisions you make. And business owners who make good decisions succeed. I want business owners to make a plan based on where they are financially. If you have no cash today, then your plan goes out 2 weeks and includes how you are going to generate sales. If you have cash then your planning period could span 6 months. Create a plan based on your world today and make it real.
3. Increase prices - you have to establish value
What is your pricing strategy? It starts with an understanding of what it costs to produce your product or service, includes understanding what your competitors are charging and has to include your ability to show value. Too often prices are set based on what the business owner 'thinks' the prospect will accept. They often devalue their service or product and that happens when they don't know what that value is. Take the time to really understand the value of your product or service and be confident in the problem it solves for your audience.

4. Aggressively manage receivables - do you have payment terms
Do your customers and clients know your payment terms? Are they listed in the small print that no one ever reads? Do you get frustrated when you don't get paid on time? After sending an invoice it's always a good idea to call to make sure the invoice was received and that the customer or client doesn't have any questions. Making assumptions in this area can really squeeze your cash flow. Be aggressive when it comes to collecting what you are owed.
5. Create milestones - alert the client on the value delivered
Want to avoid that feeling in the pit of your stomach when you send an invoice to a client and you aren't sure they will pay it? At critical points in the delivery of your product or service you should check in with your customer or client to show them the value you have delivered. Don't expect or assume they see it. If you do this regularly, you'll never have an issue with payment.
6. Managing vendors - maximize terms
If you are cash strapped, you have to protect your cash for as long as possible. That means maximizing terms for people you owe money to. If terms for payment are 30 days and you are sitting on cash and can pay it in advance, don't. Always pay your bills, just don't pay them before they are due.

7. Establish a credit line - do this when receivables are strong
While credit lines are harder to establish today than they were even 6 years ago, that doesn't mean they aren't available. Every business owner should establish a strong relationship with their banker. If you are new at a bank, introduce yourself to the President. Think you are small potatoes? You aren't and you need to establish relationships with key people at your bank. Your plan is to grow your business. They want to provide you with services where they earn interest. Be confident that your money is just as important as anyone else's.

The goal of every business is to make a profit. Is your business leaking profits? Are you working harder but not seeing the results on your bottom line at the end of each month? Visit http://www.destination-greatness.com and turn your growing business into a great business.

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How to Get a SBA Loan By David L Grigg

For our next article we wanted to talk about How to get SBA Loans. Several of our clients purchase SBA ready business plans and are not 100% sure how the process work. We though we should help shed some light on what they are, how they work and the steps in getting the loan.
What is an SBA loan?
SBA loans are term loans from a bank or commercial lending institution of up to 10 years, with the Small Business Administration (SBA) guaranteeing as much as 80 percent of the loan principal.
Who are SBA loans for?
SBA loans are for established small businesses capable of repaying a loan from cash flow, but whose principals may be looking for a longer term to reduce payments or may have inadequate corporate or personal assets to collateralize the loan.
How many loans are available?
Vast. The Small Business Administration guarantees some $12 billion per year in loans.

Best Use of Loans:
Purchasing equipment, financing the purchase of a business and in certain instances, working capital. The Small Business Administration guarantee can help borrowers overcome the problems of a weak loan application associated with inadequate collateral or limited operating history.
What are the fees or cost?
Comparatively inexpensive when looking at other loan sources. Maximum allowed interest rates range from highs of prime plus 6.5 percentage points to prime plus 2.75 percentage points, though lenders can and often do charge less. These rates may be higher or lower than rates on non-guaranteed loans. What's more, banks making SBA loans cannot charge "commitment fees" for agreeing to make a loan, or prepayment fees on loans under 15 year (a prepayment penalty kicks in for longer loans), which means the effective rates for these loans may be, in some instances, superior to those for conventional loans.
Ease of Acquisition:
Challenging. Although The Small Business Administration has created streamlined approaches to loan applications, conventional SBA guarantee procedures and protocols pose a significant documentation and administrative challenge for most borrowers.
Range of Funds Typically Available:
The Small Business Administration guarantees up to $1 million of loan principal.
Steps in Getting an SBA Loan
While most banks, as well as select commercial finance companies, offer SBA loans, there are two specialized categories worth knowing about. These are Certified Lenders and Preferred Lenders, both of which have entered into contractual relationships with the SBA and officially participate in the Certified Lender/Preferred Lender programs (CLP/PLP).

These lender programs were designed to provide better response to borrowers; they accomplish this goal by placing additional responsibilities on the lenders for analysis, structuring, approval, servicing and liquidation of loans, within The Small Business Administration's guidelines. About 850 lenders qualify for the SBA's Certified Lender Program, having met certain criteria, the most important of which, from the borrower's perspective, is extensive experience in SBA loan-guarantee processing. Certified lenders account for about 4 percent of all SBA business-loan guarantees. Since the certified bank does much of the SBA's work, the agency offers turnaround times of three business days for processing the application.
Approximately 450 lenders meet preferred lender standards. This group processes approximately 21 percent of loans. Preferred lenders have full lending authority and as a result can offer a one-day turnaround on completed loan applications.
If you are seeking a loan, your best bet is to work with a certified or preferred lender. The SBA-guarantee process is tricky at best, and you want a lender who has been through it more than once

These lender programs were designed to provide better response to borrowers; they accomplish this goal by placing additional responsibilities on the lenders for analysis, structuring, approval, servicing and liquidation of loans, within The Small Business Administration's guidelines. About 850 lenders qualify for the SBA's Certified Lender Program, having met certain criteria, the most important of which, from the borrower's perspective, is extensive experience in SBA loan-guarantee processing. Certified lenders account for about 4 percent of all SBA business-loan guarantees. Since the certified bank does much of the SBA's work, the agency offers turnaround times of three business days for processing the application.

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