United States taxpayers who hold an ownership interest in or signature authority over a foreign financial account with an aggregate balance of at least $10,000 at any point during the year must file a Report of Foreign Bank and Financial Accounts (“FBAR”) by June 30. Although taxpayers are required to file the FBAR form electronically, the information may be completed online or uploaded to the Financial Crimes Enforcement Network’s website using a recently released form. Individuals with questions about their... Read More
New Investigation Into Swiss Banks May Affect San Diego Residents With Certain Unreported Foreign Securities
In 2009, Swiss banking institution UBS agreed to pay the United States government about $780 million for its role in helping American citizens hide assets overseas in order to avoid paying U.S. federal income taxes. The case also resulted in the voluntary disclosure of previously unreported offshore assets by thousands of U.S. citizens. As a result of the legal battle, the Swiss Parliament ultimately approved a measure that allows banking institutions operating within the nation to disclose the existence of financial accounts that are held by American taxpayers without simultaneously... Read More
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
A United States Senate bill that would have repealed the Foreign Account Tax Compliance Act (“FATCA”) recently failed to reach a vote. The 2010 law was reportedly created in an effort to combat tax evasion by requiring foreign banks to disclose financial accounts with assets totaling at least $50,000 that are held by U.S. taxpayers. Overseas financial institutions that refuse to comply with FATCA’s requirements face exclusion from the nation’s financial... Read More
U.S. Taxpayers Urged to Use the OVDP to Report Undisclosed Foreign Assets Before Banks Divulge Account Information Under FATCA
According to a recent survey, nearly three-fourths of the 7.6 million United States citizens who live overseas are now considering handing in their passports. Many Americans who are thinking about renouncing their citizenship are reportedly concerned about complying with the 2010 Foreign Account Tax Compliance Act (“FATCA”). The law went into effect on July 1, 2014 and requires foreign banks to disclose financial information about U.S. citizens who maintain assets valued at more than $50,000 overseas. Banking institutions that fail to comply with FATCA face possible exclusion from U.S.... Read More
On July 1, 2014, the Foreign Account Tax Compliance Act (FATCA) went into effect. FATCA was enacted to combat tax evasion and imposes a 30 percent tax withholding on foreign deposits made by United States taxpayers who hold an ownership interest in an offshore account with a banking institution that does not submit information to the Internal Revenue Service (IRS). In addition, U.S. citizens and permanent residents who fail to disclose their offshore assets under the new law are subject to a steeper nondisclosure penalty... Read More
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).... Read More
Criminal Tax Case Reminds Californians They Cannot Use Offshore Accounts to Avoid Federal Income Taxes
In United States v. Kerr, two individuals and their former attorney were charged with various counts of conspiracy to defraud the United States government by establishing foreign bank accounts used to hide money overseas, willfully filing false federal income tax returns by omitting the income placed in their foreign accounts, and failing to file a... Read More