by Brian Mahany
The buzz in the office is the upcoming filing deadline for the IRS’s offshore tax amnesty (called the Offshore Voluntary Disclosure Initiative). Our phones ring constantly with people wondering if they should comply with the law or just hope they don’t get caught for another year. There is another deadline, fast approaching, however.
For those with current offshore accounts, the deadline to file the annual Report of Foreign Bank and Financial Account (“FBAR”) is June 30th. Here is a quick rundown of the rules:
* File your FBAR by June 30th! The form is available on line and is officially 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, 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. Uncle Sam 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 obviously this blog post is a brief summary. Don’t rely on a blog for legal or tax advice. if you have questions, call us or ask a qualified tax accountant.
Finally, we are a nation of procrastinators. How many people file their income tax return on April 15th at the last minute? That may work for tax returns but the FBAR is a Treasury return. They don’t care about the mailing date; it must be received by the 30th. Will they penalize you if it is received a day late? Why find out?
There is plenty of time to file your FBAR and to take advantage of the offshore tax amnesty program. If you need some help, call us.
Mahany & Ertl is a boutique law firm with offices in Portland, Milwaukee and Detroit. We represent people across the U.S. on tax, white collar criminal and fraud matters. For more information, contact attorney Brian Mahany at (4 14) 704-6731 (direct) or at