A leading IRS National Taxpayer Advocate has issued her mid-year findings for 2016 last week. The report is very critical on the agency’s support of US offshore taxpayers and expatriates, and focused upon the IRS’ goals for the rest of 2016. The number one area of focus continues to be FATCA – the Foreign Account Tax Compliance Act and the impact of FBAR reporting on the international community of US taxpayers.
Nina Olson expressed serious concerns about the IRS’ ability to meet the needs of US taxpayers around the world:
“…even as the population of US citizens abroad grows, and these taxpayers are facing greater challenges in voluntarily meeting their tax obligations, partly as a result of the Foreign Account Tax Compliance Act (FATCA), Foreign Bank and Financial Accounts (FBAR) reporting rules, and the Affordable Care Act.”
There are approximately 9.6 million US taxpayers who live abroad, and more than half of a million foreign nationals who are US residents or have interests requiring them to file a US tax return. The primary concern for many of these people continues to be FBAR preparation and compliance. Many foreign nationals living and working in the United States are simply unaware of their reporting requirements based upon offshore bank accounts, real estate, investments, assets and offshore income. Our office continues to speak with a flow of highly professional and educated US residents who are surprised to learn of their reporting requirements.
Unfortunately, the IRS does not consider ignorance of the law to be an excuse. For those who have not completely disclosed all offshore accounts, assets, investments and income US taxpayers should give careful consideration to the Offshore Voluntary Disclosure Program or OVDP. US offshore taxpayers must carefully monitor accumulated account balances and investments, and if those accumulated totals ever exceed $10,000 in a calendar year they must file an accurate FBAR with the IRS.
The experienced international and domestic tax attorneys at Allen Barron bring deep experience and expertise to these challenges. We work with expatriates, resident foreign nationals, and US taxpayers with offshore bank accounts, investment accounts, foreign trusts, foreign corporate ownership, real estate, assets or income. We help to bring you into compliance with the IRS and FBAR reporting and protect you from the draconian penalties imposed by the IRS for non-compliance. We invite you to contact us for a free consultation at 866-631-3470.