Why should a foreign national working or residing in the US care about IRS FBAR compliance? “None of my friends or associates are aware of this or worried about it…” is a sentiment we often hear. Unfortunately, the IRS isn’t interested in what a foreign national working or residing in the US understands about their responsibilities to the IRS and tax filing. The IRS expects all US taxpayers – including those who aren’t citizens – to understand and abide by US tax laws. The issue of IRS FBAR compliance is critical to avoid extensive unexpected financial penalties.
If you are a US taxpayer, including those who live or work in the US on a Visa Green Card, and you have more than $10,000 accumulated in accounts at any point in any tax year outside of the United States you are required to provide a “full, transparent and accurate” disclosure to the IRS through tax forms and the Report of Foreign Bank and Financial Accounts or FBAR. The failure to fully disclose these offshore bank accounts, investment accounts, stocks, mutual funds, assets, real estate, or income to the IRS will result in severe financial penalties of up to 50% of the highest accumulated balance of those assets at any point in the year, or $100,000 per incident whichever is higher. It doesn’t matter how much you have in those accounts today, the IRS will assess the penalties and pursue collections making your daily experience here in the US a harsh challenge.
The international tax attorneys at Allen Barron often work with medical professionals, high-tech industry employees and other foreign nationals who live and work in the US on a green card or a Visa such as an H1-B. These highly compensated and educated professionals often have bank accounts and investments back in their home nations and around the world. In many cases these accounts are used to transfer money from the US to family back home.
Protect yourself. According to the IRS it is your responsibility to gain a full understanding of US tax laws as a foreign national working or residing in the US and to disclose your offshore accounts, assets and income. We invite you to contact us for a free consultation at 866-631-3470 to learn more about how FBAR compliance relates to your unique circumstances. Ask about the protections of the attorney-client privilege.