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Foreign Accounts & Assets

U.S. Taxpayers Living in California and Elsewhere Must Comply With the Tax Code’s Foreign Account Reporting Requirements

Currently, about seven million United States citizens live overseas.  Since the nation’s tax laws apply to taxpayers regardless of where their income was earned, Americans who live abroad are still required to submit annual tax returns to the Internal Revenue Service.  Although the tax code presently provides for an exclusion of the first $100,800 of an expat’s offshore income, this exclusion is not automatic.  Instead, it must be claimed on an individual’s federal income tax return.


For a U.S. taxpayer who lives abroad to be entitled to the income exclusion, the individual... Read More

Taxpayers in Southern California and Across the U.S. Can Avoid Common Tax Season Pitfalls by Consulting With a Tax Professional

Tax season is in full swing. For most American taxpayers, the federal income tax filing deadline is April 15th. Often, the United States Justice Department chooses to issue an increased number of tax crime indictments during tax season. This can add to the stress associated with accurately filling out your annual income tax forms.


Much of the nation’s criminal tax enforcement efforts are focused on undisclosed foreign accounts. Taxpayers in California and across the U.S. who have an ownership interest in or signatory authority over certain foreign financial assets totaling... Read More

Criminal Case Reminds California Taxpayers to Report All Foreign Bank Accounts to the U.S. Treasury

A 46-year-old Atlanta man was recently ordered to serve four months in prison and pay almost $100,000 in restitution after he was convicted of willfully failing to file a completed Report of Foreign Bank and Financial Accounts (“FBAR”). According to federal prosecutors, the internet entrepreneur hid money he earned in a virtual world called “Second Life” in Hong Kong, Switzerland, and Thailand in order to avoid paying federal income taxes on the assets... Read More

U.S. Taxpayers With Overseas Bank Account Signature Authority Must Comply with FBAR Reporting Requirements

Each year, United States citizens and permanent residents are required by law to report all of their income to the Internal Revenue Service, no matter where it was derived. Under the tax code, any individual with an ownership or signature authority over a foreign bank account or other offshore financial asset with an aggregate value of at least $10,000 during the tax year is required to file a Report of Foreign Bank and Financial Accounts (“FBAR”). An American taxpayer who fails to timely file the FBAR faces potential fines as well as criminal prosecution.


In many ways, the... Read More

Federal Court States Couple May Not Use Fifth Amendment Privilege to Withhold Foreign Bank Records From the IRS

The District of New Jersey has ordered a couple to comply with an Internal Revenue Service summons to produce documents related to undisclosed foreign financial accounts. In U.S. v. Chabot, the IRS apparently received information from a French authority suggesting the owner of a business failed to disclose offshore bank accounts that were held in the company’s name between 2005 and 2007. After learning of the alleged accounts, the IRS summoned... Read More

Southern California Businessman Admits to Hiding Overseas Bank Accounts from the IRS

A Los Angeles businessman has pleaded guilty to conspiracy to defraud the United States government. According to the U.S. Justice Department, the American citizen owned a number of Israeli bank accounts that he failed to report to the Internal Revenue Service. The L.A. man apparently held the accounts in the names of nominee corporate entities in an effort to avoid detection by the agency. In addition, he purportedly asked the Israeli financial institution where the accounts were opened to hold his mail. Instead, the man collected his account statements directly from an international... Read More

Accountant Faces Five Years in Prison for Failing to Timely File the FBAR

A certified fraud examiner and forensic accountant has reportedly pleaded guilty to willfully hiding almost $1 million from the Internal Revenue Service in a Swiss bank account. In USA v. Bloomberg, a 55-year-old Atlanta man was accused of failing to report his ownership and control interest in a foreign bank account between 1997 and 2008. According to the United States Justice Department, the Georgia man failed to report an account that was held at UBS AG, one of the largest banks in Switzerland. The man now faces up to five years in prison and a civil fine of one-quarter of a... Read More

Now is the Time for U.S. Taxpayers Living in Canada to File Delinquent Income Tax Returns

About one million United States and dual citizens call Canada home. Many of these expatriates have mistakenly failed to file their U.S. tax return and other forms because they believed they did not owe a federal income tax. In response to such failures, the Internal Revenue Service offers streamlined filing procedures for Canadian and other expats to disclose their foreign income and become compliant with their federal income tax obligations.


Each... Read More

What Am I Required to Report About My Foreign Financial Assets?

A common question for taxpayers who have significant foreign financial assets and accounts is, “what are my reporting obligations?” In fact, taxpayers with foreign financial holdings have a myriad of reporting obligations. Understanding the reporting obligations is absolutely essential to complying with U.S. international tax laws and staying out of trouble with the IRS.


One class of special reporting duties applies to taxpayer who have “specified foreign financial assets” valued in excess of $50,000. This reporting obligation is found in IRC § 6038D(a).[1]... Read More

Additional Civil Penalties for Failing to Apply to Offshore Voluntary Disclosure Program And How to Avoid Them

Here, we will discuss some additional civil penalties to which taxpayers may be subject if they fail to participate in the Offshore Voluntary Disclosure Program.


OVDP Penalty: Failure to File Form 3520-A Reporting Ownership in Foreign Trusts

One consequence of failing to participate in OVDP is the Failure to File Form 3520-A penalty. Form 3520-A relates to taxpayers with ownership interests in foreign trusts have special reporting requirements and U.S. persons with interests in and power over foreign trusts under IRC § 6048(b) must... Read More

What Civil Penalties Apply to Taxpayers Who Fail to Use in OVDP?

One of the greatest advantage of participating in the Offshore Voluntary Disclosure Process is the immunity it provides from a variety of civil penalties. If a taxpayer has undisclosed financial assets or accounts which are discovered by the IRS, numerous penalties may apply, potentially creating a huge financial burden on the taxpayer. Participating in OVDP can massive reduce the financial impact of failing to disclose foreign financial accounts and assets. If a taxpayer who is eligible to participate in OVD fails to do so, the following penalties may apply.


... Read More

IRS States California and Other U.S. Residents Are Not Required to Include Bitcoin Assets on FBAR

In the United States, taxpayers who hold one or more financial accounts with more than $10,000 in aggregate assets overseas or who have signature authority over such an account are required to complete a Report of Foreign Bank and Financial Accounts (FBAR). The FBAR is filed to alert the Internal Revenue Service to an individual taxpayer’s relationship with certain offshore financial or securities accounts. All U.S. taxpayers with an ownership... Read More