Offshore Assets
FBAR Must Be Received by June 29 Deadline
Treasury Form TDF 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) must be received by the IRS by June 29th, if the combined balance of your foreign accounts (at any time during calendar year 2011) is more than $10,000. If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, retirement account, life insurance, annuity or other type of foreign financial account, you may be required to report the account yearly to the IRS by filing an FBAR. Here are some typical questions: Who must file? A U.S. person. Read More.
Offshore Disclosure Program Reopened Indefinitely
The IRS has reopened the Offshore Voluntary Disclosure Initiative (OVDI) with no final deadline by which taxpayers must apply. Two previous iterations of the program in 2009 and 2011 resulted in the collection of $4.4 billion in unreported income from undisclosed foreign accounts and other foreign assets. Also known as the Offshore Voluntary Disclosure Program (OVDP), the program is designed to help taxpayers who may unknowingly violate federal tax laws by failing to report income from foreign assets or accounts. Failure to comply with these requirements can result in substantial civil penalties and sometimes criminal charges. What Needs To Be. Read More.
IRS Extends OVDI Deadline in Wake of Hurricane Irene
On February 8, 2011, the IRS announced that it was implementing a 2011 Offshore Voluntary Disclosure Initiative (“OVDI”) modeled after the 2009 OVDI (although the terms of the 2011 OVDI are less favorable) for those taxpayers with unreported income or other missed filings related to offshore accounts or investments. The 2011 OVDI established an original deadline of August 31, 2011 for taxpayers to enter the program and remit all required filings. Due to Hurricane Irene, the deadline has been extended to September 9, 2011. Like the 15,000 offshore account owners who came forward under the first program, those seeking leniency. Read More.
Deadline Nearing for 2011 Offshore Voluntary Disclosure Initiative
On February 8, 2011, the IRS announced that it was implementing a 2011 Offshore Voluntary Disclosure Initiative (“OVDI”) modeled after the 2009 OVDI (although the terms of the 2011 OVDI are less favorable) for those taxpayers with unreported income or other missed filings related to offshore accounts or investments. The 2011 OVDI established an original deadline of August 31, 2011 for taxpayers to enter the program and remit all required filings. Due to Hurricane Irene, the deadline has been extended to September 9, 2011. Like the 15,000 offshore account owners who came forward under the first program, those seeking leniency. Read More.
Increased Scrutiny on Offshore Assets, Stricter Filing Requirements
As details emerge about the Foreign Account Tax Compliance Act ( FATCA ), taxpayers face the potential for duplicate reporting and steep penalties for non-compliance. FATCA seeks to close many of the loopholes allowing US taxpayers to hide assets overseas . Part of this is accomplished by taxing foreign banks that choose not to share information about US account holders. One of the largest concerns is the possibility for several large taxpayers to file duplicate forms for compliance. For example, taxpayers with offshore accounts in excess of $10,000 are currently required to file a Report of Foreign Bank and Financial Accounts . FATCA would separately require taxpayers to report accounts. Read More.
Passage of HIRE Act Means Increased Foreign Account Reporting
On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (HR 2847) . This legislation, estimated to cost $18 billion, will be paid for, in part, by tighter enforcement and increased reporting and withholding requirements associated with foreign accounts and certain payments to foreign financial institutions. INDIVIDUAL DISCLOSURES FOR “SPECIFIED FOREIGN FINANCIAL ASSETS” The HIRE Act imposes additional reporting and disclosure requirements for U.S. persons with any interest in a “specified foreign financial asset” if the aggregate value of all such assets exceeds $50,000. These reporting requirements apply to any domestic entity formed or availed of for purposes of holding directly or indirectly. Read More.