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Don’t Get Stuck With a Foreign Bank Account

Have A Foreign Bank Account? FBAR Deadline is here. Filing deadline for the IRS’s offshore tax amnesty (called the Offshore Voluntary Disclosure Initiative).

If you don't comply you will get caught. For those with current offshore accounts, the deadline to file the annual Report of Foreign Bank and Financial Accounts (”FBAR”) is here.

* File your FBAR NOW. The form is known as the TD F 90-22.1 form.
* Make sure you check the box on Schedule B of your income tax return that asks if you have an interest in a foreign account. (Failing to file the FBAR is a felony and so is supplying the wrong information on your income tax return).
* Remember to report any foreign source income too. Thus if you have an offshore savings account make sure you report the interest even if it was taxed in another country.

Many foreigners living in the U.S. and dual nationals get confused by what gets reported on the U.S. return. The IRS wants to know about all of your income even if taxed elsewhere. If you don't have an accountant familiar with offshore reporting requirements, find one. One missed step could get you charged with a crime or facing a penalty of 50% of the highest account balance.

There are many special rules, and if you don't use an expert for this you will probably have a big problem. You probably need additional advice in addition to advice on the form. There are large fines for mistakes. The FBAR is a Treasury return. You probably need to file ASAP or at lease contact the IRS with your reason for filing late. They don't care about the mailing date; it must be received on time. Will they penalize you if it is received a day late?

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.

By Lance Wallach, CLU, CHFC
Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He writes about 412(i), 419, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Pubic Radio's All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education's CPA's Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case.

Copyright Lance Wallach, CLU, CHFC

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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