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.
The Internal Revenue Service (IRS) recently announced new reporting requirements for United States taxpayers with foreign accounts. The change is in part due to the sunset of the offshore voluntary disclosures program (OVDP).
The rules regarding how the Internal Revenue Service (IRS) can conduct tax audits of partnerships have changed. It is important for business owners to review the rules and have a basic understanding of the impact on their business. In some cases, business owners may be wise to take proactive steps to better ensure their business’ interests are protected.
The Internal Revenue Service (IRS) requires taxpayers to report certain foreign assets. This requirement has led to many questions, including what should you do if you have a foreign asset? Can you come into compliance without facing serious penalties? In short yes, you should come into compliance and yes, you can mitigate the risk of serious penalties.
The Internal Revenue Service (IRS) has taken the failure to disclose foreign assets very seriously. Taxpayers that neglect to disclose this information can face serious fines and potential criminal charges.
Yet another leak has caught the media’s attention. This one primarily focuses on clients of a firm that specialized in aiding the wealthy with asset management. The leak has earned the moniker “The Paradise Papers” due to its connection with offshore accounts in the Caribbean.
The federal government devotes extensive time and resources to ensure that American taxpayers with foreign holdings pay appropriate taxes on these accounts. The Foreign Account Tax Compliance Act (FATCA) is one of the primary laws in this field. FATCA imposes many responsibilities on individual and business taxpayers with foreign holdings.
As we wrote recently, the Supreme Court of Israel was considering a challenge to the legality of the Foreign Account Tax Compliance Act, or FATCA. FATCA is a U.S. law under which banks and other financial institutions outside the United States are required to report financial information on American citizens and green card holders who have $50,000 or more. Failure to do so would lead to substantial penalties on any American assets.
The Foreign Account Tax Compliance Act, or FATCA, has major implications for people with dual citizenship in Israel and the United States. Under FATCA, foreign financial institutions are to provide account information for taxpayers holding more than $50,000 in foreign accounts to the U.S. government. Institutions that refuse to provide this information could face a withholding tax of up to 30% on any U.S. assets. FATCA is controversial in many locales as many believe the U.S. Government is infringing on privacy and interfering with the sovereignty of other nations.
If you have foreign bank accounts, you are probably already aware of how important it is to report these accounts to the U.S. Government. Under the Bank Secrecy Act (BSA), any United States person (citizen or resident) who has a financial interest in or signature authority over any financial account in a foreign country with an aggregate value of over $10,000 at any time during the calendar year, must file a FinCEN Form 114 Report of Foreign Bank and Financial Accounts or "FBAR".