Foreign Account Tax Compliance Act (FATCA)

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act which included the Foreign Account Tax Compliance Act containing new foreign account tax compliance rules. Under the Act, new reporting and disclosure requirements for foreign assets will be phased in between 2010 – 2014.

International investors are subject to annual U.S. income tax compliance filings, if they have a Green Card, or are in the U.S. for 183 days in any one tax year or for 122 days per year, over three tax years.

Please answer the following three questions:
1) Have you filed tax returns for your foreign grantor trust?
2) Have you reported your foreign bank account?
3) Have you declared your offshore income?

If the answer to any of these questions is no, please call us now for an appointment.

FBAR
A FBAR filing is a Report of Foreign Bank and Financial Account (TD F 90-22.1). If you fail to file a FBAR (due June 30th of each year), you may be subject to penalties of up to 50% of the account balance (annually) and a felony (up to 10 years in jail).

Please answer the following three questions:
1. Did you disclose the foreign bank account on your Form 1040?
2. Did you report income from a foreign bank account?
3. Did you file an FBAR for the foreign bank account?

If the answer to any of these questions is no, please call us now for an appointment.

For more information please see the following articles:

FACTA

I. General

1) FATCA – Summary of HIRE and Foreign Account Tax Compliance Act

2) FATCA – Foreign Financial Assets

3) FATCA -IRS Form 8938 – Statement of Specified Foreign Financial Assets

4) FATCA – Foreign Financial Institutions

5) FATCA – Withholding Agents

II. Reporting

6) FATCA – Six Year Statute of Limitations

7) FATCA – Foreign Financial Institutions – Qualified Intermediary

8) HIRE Foreign Account Tax Compliance: 40% Penalty

9) FATCA – Penalty for Failure to Report

III. Foreign Entities

10) FATCA – Uncompensated Use of Foreign Trust Property

11) FATCA – Foreign Trusts Treated as Having U.S. Beneficiaries

12) FATCA – Reporting Requirements for U.S. Persons Treated as Owners of a Foreign Trust

13) FATCA – Information Reporting for Passive Foreign Investment Companies

IV. Pre‐Immigration Planning

14) FATCA – Pre-Immigration Planning

V. Current Issues

15) FATCA Update 2013

16) IRS Extended Deadline (7/1/14)

FBAR

I. Introduction

1) FBAR – Ownership of Accounts and Signature Authority

2) FBAR – Exceptions & Mechanics of Filing

II. Assets

3) FBAR – Artwork and Foreign Land

4) FBAR – Domestic Corporations and Foreign Accounts

5) FBAR: Reporting Foreign Life Insurance Policy

6) FBAR – Filing Requirements for Gold or other Non-Cash Assets

7) FBAR – Hedge Funds

8) FBAR – Offshore Hedge Funds

9) FBAR Filings – Trusts

III. Tax Reporting

10) FBAR and Foreign Bank Accounts: Definitions

11) FBAR – the Element of Control

12) FBAR – Financial Interest Signatory Authority

13) FBAR – U.S. Taxpayer Tax Compliance Issues

14) FBAR – Form TD F 90-22.1

15) FBAR – Revised Form TD F 90-22.1

16) Currency Transaction Report (CTR) & Suspicious Activity Report (SAR)

IV. Tax Reporting – Special Rules

17) FBAR – Family Ownership Attribution Rules

18) FBAR – Foreign Accounts with Multiple Signatories

19) FBAR – Non-Resident Aliens

20) FBAR Filing: U.S. Permanent Residents

21) FBAR – U.S. Trustee Foreign Non-Grantor Trust

V. Amended Tax Returns (Voluntary Disclosure) Statute of Limitations

22) FBAR – Amended Tax Returns and the Risks of Voluntary Disclosure

23) FBAR – Statute of Limitations

VI. Penalties

24) FBAR – Penalty Regime for Foreign Bank Account Filing

25) FBAR – Failure to File Penalties

26) FBAR – Tax Practitioners and Professional Responsibility

27) FBAR – Annual Filing Requirements and Reasonable Cause Exception

28) FBAR – Civil and Criminal Penalties

29) FBAR Criminal Penalties: Willful Failure to File

30) FBAR Filings: Criminal Penalties: Willful Failure to File (Defenses)

31) IRS FAQ – Explanation of FBAR Penalty