Jun 16, 2022 11:00:00 AM
The IRS rigorously enforces reporting requirements on financial accounts abroad or in offshore tax havens. If you live abroad or travel frequently, maintaining an account in a foreign country is useful or necessary. Similarly, keeping funds offshore can be a useful aspect of an investment or asset management strategy. An annual Report of Foreign Bank and Financial Accounts (FBAR) is required of U.S. persons who maintain a certain threshold of money in a foreign account. The report plays an important role in helping deter tax evasion and other tax crimes in the U.S. and around the world. Foreign financial institutions and account holders are required to file reports with the IRS. The IRS then compares reports to ensure appropriate taxes are paid on monies held around the world. Types of reportable accounts can include: Essentially, the U.S. is looking for non-domestic accounts in which you may have a financial interest. Regulations around FBAR reporting can come as an unwelcome surprise to people who live in foreign countries but who may also hold U.S. citizenship. Although these dual citizens may have little to do with American interests, U.S. citizenship means taking a close look at the threshold requirements for FBAR reporting. An FBAR report is required of those with a financial interest or authority over an account held outside of the U.S. if the value of that account (or accounts) exceeds $10,000 at any time during the reporting year. This means if you have several accounts which together meet the $10,000 threshold, an FBAR is required. As with many regulations, there are also exceptions, a few of which are below: FBAR reports are not submitted with your U.S. tax return but on the Financial Crimes Enforcement Network (FinCen).If you have questions about compliance or returning to compliance, speak with an experienced tax attorney in your area. The legal team at Robert J. Fedor, Esq., LLC delivers strong legal representation to clients throughout the U.S. and abroad on matters of compliance, FBAR or FATCA reporting, or IRS criminal or civil audits. When you have tax questions, call us at 800-579-0997 or contact us. We have offices in Cleveland and Chicago.The long arm of the Internal Revenue Service (IRS) reaches for monies you keep anywhere in the world. Accurate reporting is key to remaining compliant and off the radar of the IRS.
Talk with skilled tax lawyers today about FBAR requirements
I'm an expert in tax law and international financial regulations with extensive knowledge in matters related to the Internal Revenue Service (IRS) and foreign financial reporting requirements. My expertise is rooted in a comprehensive understanding of tax compliance, specifically concerning the complexities surrounding the Report of Foreign Bank and Financial Accounts (FBAR). Allow me to provide a breakdown of the key concepts mentioned in the article you shared on behalf of Robert J. Fedor, Esq., L.L.C.
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FBAR (Report of Foreign Bank and Financial Accounts): The FBAR is an annual report required by the IRS for U.S. persons who maintain financial accounts abroad with a certain threshold of money. This report is crucial for detecting and preventing tax evasion and other financial crimes globally.
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Reporting Requirements: The IRS rigorously enforces reporting requirements on various types of accounts, including financial accounts held abroad, retirement accounts in foreign countries, annuity, life insurance, or mutual funds maintained in foreign institutions, accounts in offshore branches of U.S. banks, and accounts where you may not own the asset but have control over the disposition of assets.
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Threshold for FBAR Reporting: Individuals are required to file an FBAR if the value of their foreign account(s) exceeds $10,000 at any time during the reporting year. This applies even if the accounts are held in different financial institutions but collectively meet the threshold.
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Exceptions to FBAR Reporting: There are exceptions to FBAR reporting, and a few examples include IRA accounts where you are the beneficiary or owner, accounts owned by a government entity or maintained in a U.S. military facility, and correspondent or nostro accounts.
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Filing and Submission: FBAR reports are not submitted with U.S. tax returns but are filed separately with the Financial Crimes Enforcement Network (FinCen).
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Dual Citizens and Compliance Challenges: The article highlights the challenges faced by individuals who live abroad, hold U.S. citizenship, and may be subject to FBAR reporting requirements. Even those with little connection to American interests may need to closely examine the threshold requirements for compliance.
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Legal Assistance: Individuals with questions about FBAR compliance or those seeking to return to compliance are advised to consult with experienced tax attorneys. The legal team at Robert J. Fedor, Esq., LLC specializes in providing strong legal representation on matters of compliance, FBAR or FATCA reporting, and IRS criminal or civil audits.
For any inquiries or assistance related to FBAR requirements, the legal team at Robert J. Fedor, Esq., LLC can be reached at 800-579-0997, and they have offices in Cleveland and Chicago.