Foreign Assets

The IRS actively finds taxpayers who do not disclose their foreign bank account information, and we are here to help. It is crucial that you disclose correctly, covering all account details that the IRS requires. Accounts with an aggregate amount of $10,000 or more, over which a taxpayer has signatory authority, must be reported.

Inherited foreign accounts could be liable

If you do not voluntarily disclose any foreign accounts by filing your FBAR (Foreign Bank Account Report), and the IRS discovers your assets, you can be liable for up to 50% in civil penalties. We will guide your through the reporting process and work on your behalf to diminish your financial risk.

Failure to disclose foreign accounts to the IRS can also result in criminal prosecution. Criminal penalties can include fines of up to $250,000, 5 years in prison, or both. In addition, criminal and civil penalties can be imposed at the same time.

Read through the IRS Guidance on reporting foreign bank accounts to learn more.

"It was not my intent to fail to report my foreign accounts and assets"

It’s not uncommon for some people to make a mistake when it comes to reporting their income from foreign sources. For the most part, most people do not try to hide their foreign accounts or assets. But filling out the Foreign Bank Account Report (FBAR) incorrectly, receiving bad tax advice, being unaware of foreign compliance requirements, and just forgetting to report foreign income can be detrimental.

In fact, the penalties for not reporting foreign assets and accounts can be hefty, leading to even more chaos, expense, anxiety, strife, and even jail time.

What Constitutes a Foreign Account or Foreign Asset?

Some examples of Foreign Accounts and Foreign Assets include:

Savings
Checking
Deposit and Brokerage Accounts held with a bank or broker-dealer
Stocks and Securities issued by a foreign corporation
Note, Bond, Debenture issued by a foreign person
Interest rate and currency swaps
Foreign Partnership interest
Interest in a foreign retirement or deferred compensation plan
Interest in a foreign estate
Interest in a foreign-issued insurance contract or annuity with a cash-surrender value
Mutual fund
Trust

*Some examples of forms that may need to be filed: FinCEN Form 114 (FBAR Foreign Bank Account Report); Form 8938 (Statement of Specified Foreign Financial Assets); Form 8665 (Return of U.S. Persons With Respect to Certain Foreign Partnerships; 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 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts); and Others.

Who is Accountable for Reporting Foreign Accounts and Assets?

Any U.S. taxpayer with a financial interest in any foreign account or foreign financial asset.
Any U.S. taxpayer with a signature authority over any foreign account or foreign financial asset.
Any U.S. taxpayer who has incurred income due to having a vested interest in the financial interest of any foreign account or asset.

* tax payers can be individuals, trusts, estates, domestic entities, or a majority owner of a business

Who must Report Foreign Financial Accounts/Assets?

- Persons (citizens and resident aliens) with foreign assets or accounts of $10k or more anytime of the year.
*This applies to singles or married filing separately

Who must Report Foreign Financial Accounts/Assets?

- Persons (citizens and resident aliens) with foreign assets or accounts of $10k or more anytime of the year.
*This applies to singles or married filing separately