FBAR

Foreign financial institutions are now required by law to disclose information on U. S. account holders, and have until the end of 2013 to implement new policies to prevent those holders from evading American taxes by using foreign bank accounts.

In the last few years the US government has made it a top priority to crack down on overseas accounts that are not reported on US tax returns by passing the FATCA law.

In March of 2010, the Foreign Account Tax Compliance Act - FATCA was enacted as part of the tax law Hiring Incentives to Restore Employment Act. The purpose of this act is to target United States taxpayers with foreign accounts that are not tax compliant and are using offshore accounts to evade taxes.

Recently the Court of Appeals for the Fourth Circuit affirmed a lower district court, and ruled that two US taxpayers are required to supply foreign account bank statements under a FBAR IRS subpoena. This ruling is consistent with other Courts around the country who have held that one can not invoke your fifth amendment rights to avoid producing the documents.

FBAR stands for Foreign Bank Account Report or Report of Foreign Bank and Financial Accounts. As the name suggests, it refers to reporting certain foreign bank accounts to the Treasury Department of the United States of America.

If you suspect you may be investigated for a criminal tax matter, the best thing to do may be to come clean with a voluntary disclosure. The IRS's Voluntary Disclosure Practice may be able to help you prevent or reduce criminal prosecution for past actions related to IRS code violations. However, you should never take this step without consulting with an attorney — to get help now, contact us today at the Timothy S.

Nothing’s quite as alarming as finding out you’re in violation of a law that you didn’t know existed. If you have foreign bank or financial accounts, you may be required to file an FBAR every year. Failing to do so could mean paying tens of thousands of dollars in penalties. However, you do have options.

Living outside the United States while still a citizen can be challenging, as you still have legal obligations and requirements you must fulfill with the U. S. government. It’s easy to fall behind on tax filings and other legal obligations, and in fact, many people don’t even realize they have these obligations until they have lived abroad for years.

If you have money tucked away in a foreign bank account, you’ve probably heard the scary stories: the IRS can swoop in and take half of your balance if you haven’t filed the proper paperwork. It sounds extreme, but there’s some truth to it. U. S. taxpayers with foreign accounts are required to file an annual FBAR (Report of Foreign Bank and Financial Accounts), and the penalties for missing one can be steep.