Reporting Offshore Accounts in 2019 – Learn How to Get IRS Compliant
Reporting Offshore Accounts: If you have offshore accounts and recently learned that you were required to report these accounts to the IRS, you may have found yourself diving into various rabbit holes — only to come up empty-handed.
Unfortunately, Google is a hit or miss…and more often than not — it’s a miss.
Are Offshore Accounts Illegal?
The reason why the information regarding offshore accounts is inaccurate, is because people presume an offshore account is illegal, or that the account is located in an offshore tax haven — and even then, that does not by default make the offshore account illegal.
First, there is nothing illegal about having an offshore account.
Second, the term offshore is a bit of a misnomer because it includes when dealing with the IRS, since the term “offshore” includes any foreign account and on its own does not presume anything unethical.
For example, you could be in the UK and open up an account in a Barclays account in the Isle of Man, and Barclays will deem the account an “offshore account “– does that make it illegal?
Do I Have to Report Offshore Accounts?
Yes, if you meet the threshold requirements to report foreign accounts, then all accounts must be reported.
The Internal Revenue Service wants information. And, when that information involves your offshore accounts, the information includes items such as:
- Where the account is located
- The address at the branch for main office
- The maximum balance throughout the year
- Any income that was generated
- The type of income that was generated
- When the account was opened or closed
- Is it jointly held with a spouse?
Having to Report Offshore Accounts to the IRS is not Fair
While the information can appear somewhat intrusive (because it is intrusive) it has just become a way of life for U.S. person who meet the threshold requirements for reporting (at the current time, attempts at repealing FATCA have been denied).
Who is Considered a U.S. Person?
- U.S. Citizen
- Legal Permanent Resident (Green-Card Holder)
- Foreign Residents who meet the Substantial Presence Test
What if You Have Not Report Offshore Accounts in Prior Years?
If you are out of compliance for not properly filing or reporting offshore account information to the Internal Revenue Service, you are technically out of compliance.
And, like anything in life once yo a’re out of compliance you have two ways to go:
- You can take an about-face and get into compliance; or
- You can go further out of compliance come and hope to not get caught
While they are pros and cons to either approach, with the recent introduction of FATCA, J5, International tax enforcement groups, and renewed interest in FBAR compliance, you are probably better off with biting the bullet, and getting into compliance now.
You Need an Attorney and Law Firm that is Highly-Experienced
We have successfully more than 1000 offshore Disclosures — including complex issues involving FATCA, PFIC, CFC, Foreign Mutual Funds, and more.
Some less experienced attorneys will rely on issuing a “Kovel Letter” (since they do not have the tax experience needed to represent you) but it puts your confidentiality at risk.
The area of law is always changing, and due to recent updates in the law, including changes to various international tax agreements, regulations, statutes, and enforcement procedures — oftentimes even a “simpler” FBAR disclosure becomes an incredibly complicated process.
We routinely represent clients in:
- Offshore Assets
- Offshore Investments
- Offshore Income
- Offshore Accounts
- Foreign Businesses
- Foreign Life Insurance
- Foreign Cryptocurrency
- Foreign Real Estate
- Foreign Gifts
- Foreign Inheritance
- International Tax Investigations
- Tax Treaty Analysis
- “Cross-Border” issues
Golding & Golding, Board Certified in Tax Law
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
Golding & Golding is the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
- Learn more about the Board-Certified Tax Law Specialist credential
- Learn more about the IRS Enrolled Agent (EA) credential
- Learn more about Golding & Golding’s Case Accomplishments
- Learn more about Golding & Golding Testimonials from prior clients
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.