- 1 FATCA (2020)
- 2 Foreign Account Tax Compliance Act Summary
- 3 Who has to file FATCA?
- 4 When is FATCA Filing due?
- 5 What Forms are Required?
- 6 What is Included on the FATCA Form?
- 7 What if the FATCA Form is not filed?
- 8 What are the Penalties for FATCA Non-Compliance?
- 9 How Can you Reduce or Avoid FATCA Penalties?
- 10 Recent Golding & Golding Case Highlights
- 11 How to Hire Experienced FBAR Counsel?
- 12 Interested in Learning More about Golding & Golding?
FATCA in 2020 – What You Need to Know to Get Compliant?
FATCA is the Foreign Account Tax Compliance Act. FATCA was created back in 2010. For individuals, FATCA became an IRS requirement in 2011, on Form 8938.
As of late 2019, more than 110 countries have entered into FATCA Agreement (aka IGA or Intergovernmental Agreements) and more than 300,000 FFI (Foreign Financial Institutions) have agreed to report U.S. account holder information to the IRS.
Foreign Account Tax Compliance Act Summary
We will summarize the basics of FATCA:
- Who has to file FATCA?
- When is FATCA Filing due?
- What forms are required?
- What is included on the form?
- What if the form is not filed?
- Are there penalties for non-compliance?
- How can you reduce or avoid the penalties?
Who has to file FATCA?
FATCA: FATCA is required by foreign institutions, individuals, entities, trusts, and estates. This summary will focus on individuals and U.S persons, and not foreign institutions. FATCA filing for U.S. persons generally includes annual disclosure of “Specified Foreign Financial Assets,” to the IRS.
When is FATCA Filing due?
FATCA Filing: FATCA Filing is due at the same time the tax return is due. That is because the FATCA Form is actually part of your 1040 tax return. And, unlike other international reporting forms, the FATCA form is included with you tax software program.
What Forms are Required?
Primarily, the required form is Form 8938. Technically, Form 8938 is referred to as: Statement of Specified Foreign Financial Assets. It is an IRS form that requires the filer to include information about certain foreign assets, accounts, investments – and the income generated from these assets.
What is Included on the FATCA Form?
The forms requires the filer to include a good amount of information regarding the foreign specified assets. Some of the key pieces of information, include:
- Identifying the asset name
- The maximum value of the asset
- Location and address
- If income was generated (and how much)
What if the FATCA Form is not filed?
If the FATCA form is not filed, the “filer” may be subject to fines and penalties. While the penalties are not as bad as the penalties for similar international forms, such as the FBAR (FinCEN Form 114), they are still way too high.
What are the Penalties for FATCA Non-Compliance?
As provided by the IRS, the penalties are as follows:
If you are required to file Form 8938 but do not file a complete and correct Form 8938 by the due date (including extensions), you may be subject to a penalty of $10,000.
If you do not file a correct and complete Form 8938 within 90 days after the IRS mails you a notice of the failure to file, you may be subject to an additional penalty of $10,000 for each 30-day period (or part of a period) during which you continue to fail to file Form 8938 after the 90-day period has expired. The maximum additional penalty for a continuing failure to file Form 8938 is $50,000.
How Can you Reduce or Avoid FATCA Penalties?
We specialize exclusively in international tax, and specifically IRS offshore disclosure.
We have successfully represented clients in more than 1,000 streamlined and voluntary offshore disclosure submissions nationwide and in over 70-different countries. We have represented thousands of individuals and businesses with international tax problems.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
- Learn more about the Board-Certified Tax Lawyer Specialist credential
- Learn more about the Enrolled Agent credential
- Learn more about Golding & Golding’s Case Accomplishments
- Learn more about Golding & Golding Testimonials from prior clients
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants and Financial Professionals worldwide.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced FBAR Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.
Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.