The tax complications of international and offshore investments are quite complex, and US taxpayers with offshore investments and accounts should contact the experienced tax attorneys at Allen Barron to protect their interests and ensure compliance with complicated US tax laws. The existence of foreign bank accounts and assets usually requires the preparation and filing of the IRS Report of Foreign Bank and Financial Accounts or FBAR.
Offshore investments and ownership interests in foreign corporations automatically trigger the highest US marginal tax rate if the investment or foreign entity is determined to be a Passive Foreign Investment Corporation or PFIC by the IRS. Many forms of income including rents and royalties, dividends from external investments and other triggers make these investments a taxation challenge for US taxpayers who are searching for a greater return on investment through offshore strategies.
As part of FATCA, the IRS has developed a comprehensive set of reporting requirements for any US taxpayer who has an interest in a PFIC or foreign corporation or trust, and you may be required to report the participation of other US taxpayers or face additional taxes, penalties and interest. It is important to note that the IRS has mutual information exchange agreements with most Swiss and Cayman Island banking and investment houses, and are receiving direct information about US taxpayers including account and transactional information. The IRS accumulated data increases exponentially each day, and ultimately US taxpayers with foreign interests face a high risk of IRS audit and severe potential criminal consequences for un-reported or under-reported offshore activities.
Have you made a voluntary disclosure to the IRS through the OVDP or another IRS program? We invite you to contact San Diego tax attorneys with extensive offshore tax expertise for a free and substantive consultation at 866-631-3470. Learn about the risks you face the complex tax complications of international and offshore investments, the legitimate tax benefits you can leverage and the reporting requirements imposed upon you by the IRS and the State of California.