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Non-Resident Indians or NRIs Face IRS Offshore Scrutiny

Citizens and former residents of India face genuine tax issues while they live and work in the United States.  Many Non-Resident Indians or NRIs face IRS offshore scrutiny and FBAR compliance issues.  Many have come to the US to work, and are unaware of tax obligations that have developed as a result of FATCA the US Foreign Account Tax Compliance Act.  All US taxpayers must report offshore bank accounts, investment accounts, investments, assets, real estate and income on IRS forms and the IRS Report of Foreign Bank and Financial Accounts or FBARs.  Many NRIs do not consider the real estate their family has owned for generations, or the mutual fund investments they had back in India prior to their arrival in the United States.  Many NRIs maintain accounts in India to transfer money to family and relatives who remain in country.

India has been making a concerted effort to identify sources of “black money” – money made from cash transactions or on the black market that is not reported to India’s tax authorities.  Some experts believe there is more than $1 Trillion of Indian black money on deposit in Swiss banks.  FATCA has brought a global change to issues related to global banking, cash and taxation.  Once other nations such as India witnessed the success of the US Justice Department holding Swiss banks accountable for helping US taxpayers to evade taxes, these nations joined an international exchange of banking, asset, real estate and income reporting.  India has signed FATCA and provides the IRS direct information transfers listing Indian citizens who are US taxpayers as well as US citizens with accounts in Indian banks and investment houses.

There is no where left to hide.  The IRS gives additional scrutiny to any tax return that contains offshore account information.  They also carefully screen any US taxpayer who is a resident alien or NRI who has failed to list any foreign accounts or assets.  The IRS then compares the information provided by the NRI or foreign national to the information provided by banks and sovereign tax authorities around the world.  From there, it is a simple matter to compare the information provided on the individual or corporation to the returns they have filed.  If anything is missing, under-reported or inaccurate an IRS audit is sure to immediately follow.

If you are an NRI or a foreign national who lives and works in the US it is important to fully understand your tax reporting requirements under US law.  Ignorance of the law is no defense.  It also doesn’t matter if your friends are aware or in compliance.  Once the IRS starts sending audit letters it will be too late, and you will face draconian and harsh penalties of 50% of the highest accumulated balance of all your accounts and assets at their highest point each year for the past 6 to 8 years regardless of what remains in those accounts today, or $100,000 per incident whichever is higher.

Many Non-Resident Indians or NRIs face IRS offshore scrutiny and FBAR compliance audits based upon information shared by banks, investment institutions and sovereign tax authorities around the globe.  The international tax attorneys, CPAs and accounting professionals at Allen Barron are prepared to advise you and protect your interests.  We invite you to contact us, or call Allen Barron for a free and substantive consultation at 866-631-3470.  Ask about the protections of the attorney-client privilege.