South Florida has a large immigrant population, and with immigration comes problems with foreign bank accounts. Once you’ve obtained permanent residency (“green card”), the IRS will be looking at your banking records to find out if you have a foreign bank account. All United States citizens or permanent residents have an obligation to report a foreign bank account or a combination of foreign bank accounts with a balance more than $10,000.00 at any point during the tax year.
Touch the $10,000.00 point at any time and you have to report for that year. This is mandatory and can result in severe penalties if not complied with. The paperwork is due in June every year.
You’ll hear two different acronyms thrown around regarding reporting foreign accounts: FBAR and FACTA. FBAR is short for “Foreign bank and financial account report.” This is the report that’s due every June. It’s a disclosure form, so no money needs to be sent with it. However, failure to file the form can cost you $10,000 minimum if the IRS decides to go after you. You could also go to jail. Reporting is required for people of all ages that hold a foreign account that meets the threshold. For instance, if your child has a trust in a foreign country that meets the minimum, that has to be reported as well.
FACTA is the Foreign Account Tax Compliance Act. The purpose of the act is to go after individuals who use foreign accounts to hide money from the IRS. If you have a foreign account that has reached certain thresholds, usually around $50,000, you will need to file a Form 8938 with your tax return in order to stay compliant along with an FBAR statement in June. You do not want to forget this form. It is vital.
In recent times, the IRS has stepped up their investigation of those individuals not in compliance with proper foreign bank account reporting. Accountants not familiar with offshore accounting may not know what to do. Zuckerman Law, L.L.C., can help. We can assist you in filing your current forms and/or walk you through the procedure if you have not filed.
If you are receiving IRS notices about the failure to report foreign accounts, call us. Depending on the facts of each case, we may be able to help you avoid penalties. There have been programs put in place for those individuals who simply did not realize they had a reporting requirement, but many immigrants and expats do not know of these programs.
If you have a foreign bank account with more than a $10,000.00 balance or more at any time during the year you have detailed and specific filing requirements. Failure to file could cost you a fortune, as well as criminal prosecution.
Don’t let the failure of mailing off a simple form every June land you in legal hot water. If you own a foreign bank account and you don’t know how to report it, contact Zuckerman Law. Our tax law firm serves all of South Florida. We are the choice foreign bank account reporting lawyer in Fort Lauderdale, Coral Springs, Miami, and the surrounding areas.
Zuckerman Law, L.L.C.
Phone: (954) 280-8292