Assisting US Account Holders
Assisting U.S. Account Holders.
We are specialized in this area of the law and stand ready to assist you with these very complicated, confusing and financially troubling laws and related civil and criminal penalties.
If you are a U.S. citizen, Green-Card Holder or Tax Resident of the United States, then each year you must report your worldwide income on your U.S. income tax return. Plus, if you have an interest in a foreign bank or financial account you must check “yes” (on Schedule B) of Form 1040. This is true even if you live outside the U.S. or pay foreign taxes on your foreign income.
Tax return filing alone isn’t enough. All U.S. persons with foreign bank accounts exceeding $10,000 at any time during the year must file an FBAR by each June 30th.
Now with your tax return, you may also need to file an IRS Form 8938 to report your foreign accounts and assets.
Failures to file timely can be considered tax evasion and fraud. The criminal statute of limitations is six years. Plus, the statute of limitations never expires on civil tax fraud.
The penalty for failing to file an FBAR is $10,000 for each non-willful violation. If willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation. Each year you didn’t file is a separate violation.
Tax evasion can carry a prison term of up to five years and a fine of up to $250,000. Filing a false return can mean up to three years in prison and a fine of up to $250,000. Failing to file a tax return can mean a one-year prison term and a fine of up to $100,000. Failing to file FBARs can be criminal too with monetary penalties up to $500,000 and prison for up to ten years.
Voluntary Disclosure Is Still An Option under the Amnesty Program, if you contact the IRS before they contact you.
- A “quiet” disclosure is a correction of past tax returns and FBARs by filing original tax returns, Federal Form 104o and related supplements or Amended Tax Returns, Federal From 1040X, and here is the real problem, without drawing attention to the IRS of your failings to file what you are doing. The IRS warns against it
- Can you merely begin filing the current year’s tax return and forget about the past filings? With the newly trained IRS Agents, the advancement of the computer mixed with information mining by the IRS, the risk is completely against you. Remember, once the IRS contacts you on non-filing, you have lost your opportunity to make a voluntary disclosure under the Amnesty program.
- The U.S. Treasury and the IRS both agree that is it totally legal to have foreign assets, foreign bank accounts, foreign trusts, and foreign entities so long as you make the proper timely disclosures and payment of any tax assessment or tax liability that may then exist.