June 30 is an important deadline for any US citizen or foreign national working in the US that has any real property, assets or financial accounts outside of the United States. You are required to disclose any foreign bank or investment account (through your FBAR) as well as any real property or asset to the IRS. It is easy to misunderstand the scope of the reporting requirements, but this mistake can carry costly penalties and long term financial implications. One common example in my clients is rental property. A client comes to the US to work, and decides to keep their house (in their native home) and rent it out while they work in the United States. In most cases they have owned this property for many years and there might be substantial equity in that property. Now, the IRS becomes aware of that ownership through reciprocal reporting agreements with sovereign governments and tax authorities around the world. The IRS can assess whatever value they choose on that property, resulting in substantial taxes, penalties and interest, as well as a substantial capital gain risk if you choose to sell or transfer the property to resolve the underlying problem. People come to me with these types of circumstances and a bill for tens of thousands of dollars from the IRS in their hands.

If you have property or financial accounts offshore (outside of the US) you need to contact me immediately at 866-641-3470 to schedule a consultation. Our first step is to prepare the required FBAR by June 30, while attending to any amendments that might be required for previous years. I will work with you under the protection of attorney-client privilege to assess the implications of your foreign holdings and advise you on the most effective strategy to minimize your IRS tax exposure, so that you can focus on your family and work, and enjoying your time here in the United States.

Tags: FATCA, FBAR, offshore assets or financial accounts, real property

 

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To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.