Foreign Financial Accounts Can Cost You Big Time
I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS. Participating in the global economy can easily run you afoul of the Government for the failure to report on Foreign Financial Accounts. The civil penalties for failing to report can cost you 50% of your holdings. Here is the real kicker, you may have to file information on these accounts in two different places – the IRS with Form 8938 and Department of the Treasury with Form 114.
The complexity behind these filings is immense, so here are the bear minimums to alert you if you have a potential problem with this issue. You need to worry about this if:
You are a US Citizen or Resident, or any US business entity to include corporations, limited liability companies, partnerships and trusts.
You have either a financial interest or signature authority of a Foreign Account or Accounts that exceed $10,000 in value at any time over the calendar year.
The exception to the both rules are foreign accounts held by IRA’s, 401Ks, and US mutual funds.
From here, life gets really tough in that you must figure out if you need to file with either the IRS or the Department of the Treasury or both. Very likely – both. There are differences as to the threshold amounts requiring filing and whether a US Territory is considered to be a foreign account. For more information, here is the link to the IRS information on FBAR.
If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email email@example.com.