The requirement for U.S. taxpayers to file FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR), exists under the Bank Secrecy Act (BSA). This statute was enacted in order to aid in the federal government’s fight against money laundering and other financial crimes, and violations of the BSA are taken very seriously. As a result, while it might not seem like a big deal if you failed to file an FBAR, the consequences can be substantial—and in some cases, FBAR violations can lead to criminal prosecution. Here, Boston offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains the penalties for failing to file an FBAR:  

Just like other types of investment transactions, cryptocurrency sales and trades are considered taxable events under the Internal Revenue Code. This does not necessarily mean that you owe tax on the transaction (if you lost money on a trade, for example, you would not owe tax), but it does mean that you have an obligation to report the transaction to the Internal Revenue Service (IRS) and pay tax if tax is owed.

If you have fallen behind on your federal taxes, you are not alone. According to Internal Revenue Service (IRS) data, more than 14 million U.S. taxpayers owe outstanding taxes, interest and penalties. Due to this enormous number, the IRS offers various options to taxpayers who are in need of financial relief, one of which is the offer in compromise program.