- 1 FATCA Singapore & International Foreign Asset Reporting
- 2 Foreign Financial Institution (FFI) Requirements
- 3 FATCA Singapore U.S. Taxpayer Reporting
- 4 Taxpayer Non-Compliance with FATCA Singapore
- 5 What is CRS?
- 6 Failed to Report Foreign Accounts, Assets or Income to IRS?
- 7 Can I Just Start Filing FBAR & FATCA This Year Instead?
- 8 Our FBAR Lawyers Represent Clients Worldwide
FATCA Singapore & International Foreign Asset Reporting
In 2014/2015 the United States in Singapore negotiated and entered into a FATCA agreement (In January 2021 there’s a new version of the agreement that superseded the prior version.) FATCA is the Foreign Account Tax Compliance Act. The purpose of the act is to ensure that tax pair is in both countries are actively reporting accounts, assets, investments in income to the government. The FATCA reporting requirements ensure that, for example a U.S. person with foreign accounts in Singapore is properly reporting their foreign accounts to the U.S. government with the IRS tax return. The overall goal of FATCA Singapore is to minimize and eliminate offshore tax evasion between the two countries. We will summarize the basics of the FATCA Singapore Reporting Agreement
Foreign Financial Institution (FFI) Requirements
Foreign Financial Institutions or FFIs are required to report U.S. account holder information to the U.S. government, and vice-versa.
For example, if Michael is a U.S. Legal Permanent Resident and has an account at DBS, then DBS is required to report the account holder information, balances, and other information to the IRS.
FATCA Singapore U.S. Taxpayer Reporting
When a Taxpayer meets the FATCA Singapore threshold requirement for FATCA, they are required to report the institution, balance and income information on Form 8938.
In addition, to the FATCA 8938 Form, Taxpayers may have other reporting requirements as well, including:
- FBAR (FinCEN Form 114)
- Form 3520
- Form 3520-A
- Form 5471
- Form 8621
- Form 8865
Taxpayer Non-Compliance with FATCA Singapore
The failure to comply with FATCA Singapore reporting and other offshore filing requirements may result in Form 8938 penalties, along with other offshore penalties.
These penalties may be avoided and/or abated with voluntary disclosure or reasonable cause.
What is CRS?
CRS is the Common Reporting Standard. It is similar to FATCA, and sometimes referred to as GATCA (Global Account Tax Compliance Act). The CRS requirements are similar to FATCA, but the U.S. is not a part of CRS.
When a taxpayer receives a FATCA Letter, it is sometimes titled a FATCA CRS Letter.
Failed to Report Foreign Accounts, Assets or Income to IRS?
The IRS developed various Amnesty Programs, which are programs developed by the Internal Revenue Service to assist Taxpayers who are already out of compliance for non-reporting.
Some of the more common programs, include:
- Voluntary Disclosure Program (VDP or “New” OVDP)
- Streamlined Domestic Offshore Procedures
- Streamlined Foreign Offshore Procedures
- Delinquency Procedures
- Reasonable Cause
Can I Just Start Filing FBAR & FATCA This Year Instead?
No, unless the current year is the first-year you had a Reporting requirement. Otherwise, if you had a prior year reporting requirement, but only begin to start filing in the current year (Filing Forward) it is illegal. In the world of offshore disclosure, this is referred to as a Quiet Disclosure.
The IRS has warned taxpayers that if they get caught in a Quiet Disclosure situation, it may lead to willful penalties and even a criminal investigation by the IRS Special Agents.
Our FBAR Lawyers Represent Clients Worldwide
Our FBAR Lawyer team specializes exclusively in international tax, and specifically IRS offshore disclosure.
Contact our firm today for assistance.