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FBAR Filing Deadline Nears for U.S. Taxpayers in Southern California and Elsewhere

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

Case Reminds Southern California Taxpayers With Overseas Bank Accounts to File a Timely FBAR or Risk Civil Penalties

The Internal Revenue Service is tasked with enforcing the portion of the Bank Secrecy Act of 1970 that requires American taxpayers to disclose their foreign financial assets and accounts.  As a result, United States taxpayers who own or hold signature authority over an offshore bank account with an aggregate balance of at least $10,000 must file the Report of Foreign Bank and Financial Accounts (“FBAR”) by June 30 of each year. If an individual fails to do so, significant civil penalties may result.


In... 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

California Taxpayers Should Consult With an International Tax Lawyer Before Disclosing Previously Unreported Offshore Bank Accounts

According to the Internal Revenue Service, millions of American taxpayers currently hold an ownership interest in an unreported foreign bank account. In addition to Swiss bank account holders, dual nationals, United States citizens living abroad, green card holders, and others may have an unreported foreign financial account. Since the Bank Secrecy Act was passed by Congress in 1970, American taxpayers with at least $10,000 in aggregate assets that are held offshore must file an annual report with the IRS.


By June 30 of each year, such accounts must be disclosed using the... Read More

Southern California Doctor Faces Prison Sentence and Civil Penalties Over Failure to File the FBAR

A Laguna Beach, California physician is reportedly facing a potential prison sentence over his failure to file a Report of Foreign Bank and Financial Accounts (“FBAR”) in 2009. According to the United States Justice Department’s Tax Division, the American citizen maintained money in a Luxembourg bank account using a foreign corporate entity that was set up with the assistance of his tax preparer. Prosecutors from the U.S. Attorney’s Office for the... Read More

Survey Highlights the Difficulties Many Taxpayers With Foreign Accounts Face When Completing the FBAR

United States taxpayers who have an ownership interest in or signature authority over a foreign financial account with a balance of at least $10,000 at any time during the tax year are required to file an electronic Financial Crimes Enforcement Network (“FinCEN”) 114, Report of Foreign Bank and Financial Accounts (“FBAR”) by June 30th. According to a recent survey conducted by the Association of Americans Resident Overseas (“AARO”), only 88 percent of the taxpayers who responded complied with their FBAR... Read More

Criminal Penalties May Result from a California Taxpayer’s Failure to Report Offshore Accounts

In October, a St. Louis man pleaded guilty to one count of filing a false income tax return and one count of failing to file a Report of Foreign Bank and Financial Accounts (“FBAR”). The Missouri man was apparently charged with the two felonies after he was investigated by the Internal Revenue Service’s Criminal Investigation Division. According to the indictment, the man chose not to disclose the existence of bank accounts he held in Switzerland and Singapore to his tax preparer between 2006 and 2008. In addition, the man apparently failed to file a completed FBAR between 2007 and 2010.... Read More

Los Angeles Tax Preparers Convicted of Helping Clients Across the U.S. Hide Money Overseas

According to a recent United States Department of Justice press release, a California jury convicted two Los Angeles tax preparers of conspiring to defraud the Internal Revenue Service and willfully failing to file a Report of Foreign Bank and Financial Accounts (“FBAR”). The men will reportedly be sentenced for their crimes in March 2015.


According to evidence offered at trial, the father and son team operated a tax preparation... Read More

Statute of Limitations Varies for IRS Audit of Tax Returns and Foreign Income

In general, the Internal Revenue Service has up to three years from the date a tax return was due to perform an audit and 10 years to collect any taxes owed. Interestingly, filing an amended return does not alter this time limit. Despite this, a number of exceptions may extend the statute of limitations. For example, a taxpayer who failed to report at least one-quarter of his or her income may be audited for up to six years. In addition, the audit timeframe is doubled for individuals who did not report over $5,000 in income that was earned overseas.


Normally, a taxpayer’s... 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

U.S. Taxpayers Who Hide Money Overseas May Face Federal Prosecution and Civil Penalties

A Jamestown, Kentucky man was recently arrested and charged with tax evasion and conspiring to defraud the United States government by using secret foreign bank accounts to hide assets. According to a press release issued by the U.S. Attorney’s Office for the Southern District of New York, the man stands accused of establishing and maintaining several secret financial accounts in Switzerland using a sham foundation so that he could avoid paying his U.S. tax liability. He will reportedly be arraigned in a Manhattan federal court in early December.


The allegations included in... Read More

Criminal Prosecution Reminds Taxpayers in California and Elsewhere to Voluntarily Report Offshore Bank Accounts

According to the United States Justice Department, a New Hampshire businessman recently pleaded guilty to filing a false and fraudulent federal income tax return for the 2009 tax year. The man apparently jointly held a secret offshore bank account in Switzerland with his sister. The high balance of that unreported overseas financial account purportedly reached about $1.3 million in 2009. In addition, the businessman reportedly failed to report his interest in a financial account with an Israeli banking institution on his income tax return.


Interestingly, the man reported... Read More