It is an unfortunate myth that the IRS will not be able to find out about your bank accounts as long as they are overseas. This is true even if you do not consider yourself to be placing large sums of money in overseas accounts. If your foreign bank account has a balance of $10,000 or more, then you must file a Form 114. Also known as the foreign bank account report (FBAR). There are penalties associated with failing to report a foreign bank account.
Even if you do not owe taxes on money stored in foreign bank accounts, you may still have to disclose their existence. If you don’t disclose them, you could risk facing serious consequences. Do you wonder how the IRS finds out about the existence of foreign bank accounts? They receive reports from the foreign financial institutions.
According to the Foreign Account Tax Compliance Act (FACTA), foreign banking institutions must disclose the identities of U.S. citizens who maintain accounts at those banks to the IRS.
The IRS often offers amnesty programs if you confess to having a foreign bank account. This can only happen before the IRS sends you a compliance warning letter. You must be careful about disclosing this information and should consult with me before doing so. An experienced tax attorney can save you tons of time and grief in dealing with the IRS.
Taking a proactive stance on bank account reporting is usually the best solution to a compliance issue with the IRS.
Many clients with foreign bank accounts have trusted the team at the Law Offices of Darrin T. Mish, P.A. to handle their reporting issues with the IRS. I welcome the chance to speak with you about your foreign bank account situation. I would love to address any questions and concerns that you might have. Call today for an appointment.