For those who are residing or working in the United States it is important to understand foreign nationals must meet FBAR compliance and reporting. Many professionals working under an H1-B visa, or those who are married to US citizens do not realize they must make a full disclosure of their offshore accounts and assets. Every year, US taxpayers must list every bank account, investment, asset and source of income, as well as interests in a foreign trust or corporation.
Allen Barron has a unique blend of international tax, accounting and legal experience and expertise. We work with professionals, business owners and all US taxpayers with offshore interests. We advise clients on the two major options for coming into compliance with FBAR reporting: OVDP and the Streamlined Domestic (Foreign) Offshore Procedures. The key issue is willful or non-willful conduct on the part of the US taxpayer. Many foreign nationals will qualify for the streamlined program which offers a greatly reduced 5% penalty provision. However, the streamlined program requires an extensive biographical disclosure to the IRS. The questionnaire covers all aspects of education, financial experience, travel, reasoning behind investments and accounts, as well as disclosure of specific accounts and assets. The disclosure is made under “penalty of perjury” and opens the taxpayer to issues in litigation down the road.
Allen Barron guides our clients through this process, completing all paperwork and protecting their interests. In cases where more complex or extensive offshore financial dealings exist, the Offshore Voluntary Disclosure Program or OVDP may provide the best legal protections against criminal prosecution. Many international banks and financial institutions have been identified by the IRS as assisting US taxpayers with tax evasion. These institutions may result in an automatic penalty of 50%, however the program will provide protection against criminal tax evasion exposure.
These are important decisions as foreign nationals must meet FBAR compliance and reporting requirements. We invite you to call for a free consultation at 866-631-3470.