Many US expatriates focus on the amount of income that is excluded from US federal income taxes, and the thresholds for reporting and taxation. However, the most immediate threat to US expats isn’t related to income taxes, it is based upon the offshore bank accounts and investment accounts in which they have an interest. As a US citizen or a green card holder, you are required to file the Foreign Bank Account Report or FBAR with the IRS by June 30, 2014. This report will disclose all of the accounts and related balances to the IRS. Until this year, many countries and institutions did not provide the US or the IRS with information about accounts within their banks, transactions or taxation information. Many US citizens and US expats have taken advantage of these “safe havens” to shelter income and assets from US taxation. As an expatriate, you need to be aware that 2014 is a year of new transparency to the IRS internationally, and this can have severe financial consequences for you.
The IRS has reached agreement with multiple sovereign nations and have access to the related banking, investment and retirement holdings belonging to US citizens or green card holders that are contained within these accounts. For example, a recent US senate sub-committee report alleges that Credit Suisse has helped US citizens to hide assets from the IRS and avoid billions of dollars in US taxation for many years. Recent agreements with Swiss and other worldwide banking and taxation authorities means the IRS will have full information on these hidden assets, and after June 30, 2014 your risk moves from a taxation matter to a potential criminal matter. The next 2 months are critical. It is time to get your offshore financial house in order from the perspective of the IRS. There are strategies that Allen Barron can provide to help minimize your exposure and avoid potential criminal charges. We invite you to contact us for a free consultation at 866-631-3470 today.
