Are you a foreign national living or working in the United States? Allen Barron has important tax information for foreign nationals in US territories or who live and work in any of the 50 states:
You are required to report all foreign bank accounts, investments and assets to the IRS by filing FBAR and other important IRS return information. The failure to do so will expose you to penalties of 50% of the highest accumulated balance at any point during the year or $100,000 per instance, whichever is higher.
While you may have no taxable income, the sheer existence of offshore bank accounts, investments or even real estate can trigger an incredibly high penalty with the IRS. You are required to report all of these accounts and assets on a form known as the “Report of Foreign Bank and Financial Accounts” or FBAR. The IRS FBAR is required for any US resident (including foreign nationals) who have offshore bank accounts, investment accounts, investments, business ownership, assets or income.
The failure to file the FBAR with the IRS will result in exposure to extremely harsh financial penalties. The IRS would require you to pay 50% of the highest accumulated total of all your foreign or offshore accounts for each year, or $100,000 per incidence whichever is higher. It doesn’t matter how much is in the account today, or if the account is closed. The “look back” period is up to 8 years, so it is important to come into compliance with FBAR reporting through either the Offshore Voluntary Disclosure Program or OVDP, or the Streamlined Domestic Offshore Procedures. These programs have been established to allow all US taxpayers to come into compliance with FBAR reporting and FATCA requirements, while paying a smaller penalty to the IRS in return for their voluntary compliance.
These are complex forms, and the tax related questions are quite complex. This is important tax information for foreign nationals in US territories. We invite you to contact the international tax attorneys and accountants at Allen Barron for a free consultation at 866-631-3470. Learn about your responsibilities under US tax law as a resident foreign national here in the United States.