IRS Amnesty Program for Hidden Foreign Accounts Ends September 2018
If you have hidden foreign bank accounts, you have until September 28, 2018, to disclose them and come into compliance with the tax law, to avoid prosecution. The IRS is finally ending its “amnesty” program from 2009, and if you are found guilty of trying to avoid taxes, the penalties are stiff and criminal prosecution may ensue. You have 5 months to make things right.
Legitimate reasons exist for having financial accounts in other countries, but those assets must be reported to the U.S. government. Foreign accounts with an aggregate value of $10,000 or more in a calendar year must be reported by filing a “FBAR” known as the Foreign Bank and Financial Accounts Report. Those who fail to make April 17th deadline can get an extension up to October 15th. If you’re required to submit an FBAR, and if you hold more than $50,000 in overseas assets, you may also need to turn in a statement of specified foreign financial assets or “FATCA” Form 8938 to the IRS when you file your income tax return by April 17.
Folks run into tax problems all the time, often by mistake. If they receive a foreign gift of money or property, they don’t remember to file Form 3520. Or they forget the FBAR must go to the Treasury’s FinCEN bureau, and Form 8938 goes to the IRS. Some invest in foreign mutual funds not realizing this is a red flag. Occasionally, inheritance or trust issues are to blame, as is joint ownership with a spouse. Be aware that overseas banks and certain other nonfinancial entities are bound by law or treaty to tell the U.S. government about foreign assets held by their U.S. account holders.
Time may be running out for you to make a voluntary disclosure about non-U.S. assets and income that may reduce or eliminate the penalties you otherwise may owe. With barely five months till September 28th, it is time to contact your trusted advisors at Fuoco Group if you are not sure of your filing obligations, or need an advocate to help bring accounts into compliance after years of non-disclosure. Our CPAs are experienced and well versed in international accounts, international businesses and foreign partnerships, and high net worth individuals with foreign assets.