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IRS reminds taxpayers to report foreign assets

Tax Day has passed, but some taxpayers may have missed an important form. In certain situations, the government requires taxpayers to file additional paperwork. One example: foreign accounts. The Internal Revenue Service (IRS) recently published an announcement reminding taxpayers that fall into this category to report foreign bank accounts and other financial interests.

When do taxpayers need to report foreign assets? The IRS requires report of these interests at the same time income tax returns are due. The bad news: if you need to file this paperwork you are likely already late. The good news: the government gives an automatic extension.

Taxpayers who failed to file a required Report of Foreign Bank and Financial Accounts (FBAR) with the Financial Crimes Enforcement Network (FinCEN) to report foreign assets generally qualify for this automatic extension. The extension gives the taxpayer until October 15 to file the required paperwork.

Who needs to file an FBAR? The IRS requires taxpayers to file an FBAR if they have a financial interest outside of the United States that has a balance over $10,000 at any point during the applicable tax year.

There are some exceptions to this requirement. For example, the agency does not require reporting if the account is held at a United States military banking facility or part of a retirement plan.

What if I have not properly reported foreign assets? Taxpayers that have failed to disclose foreign assets are wise to seek legal counsel. Options are available to come into compliance. The attorneys at Goldburd McCone can review your tax situation and discuss the benefits and risks with each option.

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