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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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I operate an exporting business and I frequently have to

Customer Question

I operate an exporting business and I frequently have to receive large amount of wire transfer from an offshore bank. What steps should I take to make my business transparent to IRS?
Submitted: 1 year ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your question. Please permit me to assist you with your concerns. What steps, if any, have you taken so far?
Customer: replied 1 year ago.
so far I have been doing the following
1- keep track of my expense, income
2- file all tax paperwork including sale tax, franchise tax and income tax
Customer: replied 1 year ago.
Basically my business involving buying products in the United Stated and ship them back to my country, Vietnam. Because of the nature of my business, I have to receive large amount of wire transfer, usually about $20,000 per month or may be higher.
Customer: replied 1 year ago.
all of my transactions are between businesses, and I saved all of the documents including receipts, shipping service, tax, etc. I wonder if there is any risk to me if I keep receiving large amount of wire transfer from outside US, and what I should do to protect myself, especially from IRS. I'm running a legitimate business and want to look like that in their eyes at least.
Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your patience.There are two suggestions, and both are probably a must for someone in your position. First, invest into a GOOD CPA...as a good CPA can help file notices to the IRS and show that you are reporting and behaving correctly under US law. Second is the reporting itself--look to Form 8300 and to Form TD F 90-22.1 which require you to report any transactions of above $10,000, be it cash or overseas accounts that you receive. In this instance. Please review this great summary of your steps as far as reporting:http://www.irs.gov/pub/irs-utl/reporting_cash_transactions_and_foreign_financial_accounts.pdf You can find the forms here:http://www.irs.gov/pub/irs-pdf/f8300.pdfhttp://www.fincen.gov/forms/files/f9022-1_fbar.pdf Sincerely, ***** *****
Customer: replied 1 year ago.
thank you
Customer: replied 1 year ago.
do I need to file both? Because the money in the account oversea isn't mine. It belongs to my friend, and he send the money here so that I can purchase equipment for him. I can't use that money for personal reason or whatsoever. So do I need to file the Report of foreign bank account?
Expert:  Dimitry K., Esq. replied 1 year ago.
Hi,
If the funds are received by you, you MUST report it, even if the funds aren't yours. Once and if you receive the funds, they become yours and are your obligation to report. And yes, you must report (and do not take the funds into your own account, as doing so can create a basis for a claim for money laundering).
Sincerely,
Dimitry Esq.
Customer: replied 1 year ago.
what do you mean by "not take the funds into your own account"? Because the money was transferred into my bank account, I can't receive cash.
Customer: replied 1 year ago.
also, how often do I have to file FBAR? The deadline is June which is already passed for this year. Do I need to wait until next year? I started my business in April.
Expert:  Dimitry K., Esq. replied 1 year ago.
Hi,
You need to file annually. If you missed the deadline, retain a CPA and file it late, but file it because failure to file can create a basis and claim for money laundering and failure to report. By 'your account' I mean an account under your name, not an account under the company name--you must not receive direct transfers because it can later on create a very very serious issue with the IRS and proper reporting.
Sincerely,
Dimitry, Esq.