How Foreign Bank Accounts may affect you

It has been a while and I’m glad to be back to share important tax facts with the community, and as always, I welcome your feedback.

Now that we are well on our way into 2014, so much has changed. Tax rates have increased, new taxes have been created and many deductions have been lost or limited. These changes open the door for deeper tax planning.

For now, I want to focus on issues that affect many South Floridians- disclosure of foreign bank accounts, foreign companies and other specified assets.

The IRS has been more focused on these issues in recent years, providing multiple voluntary disclosure opportunities for US taxpayers who have failed to properly disclose their foreign assets. If accepted into the program by the IRS, US taxpayers will file amended tax returns, file all required disclosures, pay any unpaid tax and penalties and avoid criminal prosecution. This is a really big deal and an enormous opportunity for any US taxpayers who have failed to file their required disclosures.

If you have ownership, signature, authority or control over foreign bank accounts and have not reported to the IRS, this is your opportunity to do so. Many banks in Switzerland, Israel, and other offshore locations have entered into agreements with the US to report accounts owned by US residents. With FACTA (Fair and Accurate Credit Transactions Act) now in effect, it is even more imperative than ever to comply, as failure to report foreign bank accounts will be an open invitation for criminal investigation, which is something no one wants to experience!

The fact remains that foreign bank account reporting is relatively simple and may have little or no tax impact, as with most foreign reporting requirements. The best thing you can do, is to make sure that you have competent tax advisors who specialize in international tax.

If you or someone you know has any concern with these issues, I suggest you seek counsel immediately.
Alan Lips is a Certified Public accountant and Partner at Gerson Preston Robinson and may be reached at 305-868-3600.

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