Several weeks ago, we wrote several posts about the International Consortium of Investigative Journalists and the controversial “leak” of hundreds of thousands of documents detailing foreign accounts worldwide. According to Canada’s CBC News, as many as 100,000 people with accounts in 170 countries may have had their identities disclosed.
Owning foreign accounts is completely legal for U.S. taxpayers, if the accounts are properly reported. A foreign bank, brokerage or other financial account must be reported annually on Schedule B of one’s tax return and on a Report of Foreign Bank and Financial Accounts (FBAR for short). Offshore hedge funds, commodities accounts, precious metals accounts and even some insurance products and retirement accounts must also be reported.
The IRS believes that millions of U.S. taxpayers have not filed FBARs. The penalties for a willful failure include prison. Even a non-willful failure can lead to huge civil penalties, however.
While the government scrambles to find all these accounts, journalists, hackers and “leakers” have found much information. Since we ran the leak story in April, several people have called to find out if they are on the list of people whose names are disclosed. Obviously, if journalists have the information, you can bet the IRS isn’t far behind. Now that information is available on line!
We caution readers that just because your name is on the list doesn’t mean you have done anything wrong. Many of the people on the list have probably filed FBARs and reported any foreign income.
Interested to see if your name is on the list? Just click here, the link will bring you to the ICIJ’s offshore leaks database.
Whether or not the list contains your name or the name of a company you may have created, the time to come into compliance is running out. The IRS is offering an amnesty program called the Offshore Voluntary Disclosure Program but it comes with a hitch. If the IRS finds you before you find them, amnesty is not an option.
If you have not filed FBARs in past years, give us a call. We have helped many taxpayers and financial institutions with questions or concerns about FATCA (the Foreign Account Tax Compliance Act) and FBARs. For more information, contact attorney Bethany Kroes at or by telephone at (414) 223-0464. All inquiries are protected by the attorney – client privilege and kept in complete confidence.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. IRS tax related services available worldwide.
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Written by Brian Mahany, Esq.