The Internal Revenue Service and Department of Justice are aggressively pursuing taxpayers with undeclared offshore assets and accounts. If you have an offshore account, you may have a limited amount of time to disclose the account before you face serious consequences, including possible criminal charges.
The Foreign Account Tax Compliance Act ("FATCA") was enacted in 2010 to combat tax evasion by U.S. residents and non-residents holding assets in offshore accounts. Under FATCA and other related laws, those with a U.S. tax reporting obligation holding investments outside the United States valued in excess of $10,000 are required to file an annual Report of Foreign Bank and Financial Accounts (FinCEN Form 114 or "FBAR") with the IRS. Since 2011, taxpayers have also been required to complete and file IRS Form 8938 with their tax returns if their offshore account value exceeds certain thresholds.
FATCA also requires foreign financial institutions to report information directly to the IRS regarding offshore accounts owned by U.S. taxpayers or face harsh penalties and withholding requirements that adversely affect account balances. Increasingly, the United States is working with other countries through bilateral tax treaties and other foreign tax agreements to identify the holders of foreign accounts.
The Wilson Firm's tax lawyers can help you avoid civil and criminal penalties, and determine the best course of action for disclosing these offshore assets based on your particular facts and circumstances.