Have a Tax Question? Ask a Tax Expert
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.There are laws already in effect that require a US citizen or resident alien to report accounts abroad.
Before then there was the FBAR reporting using Form 90-22.1
Can I just ignore it? NoHow will anyone find out? Foreign banks and institutions have already been advised on their reporting obligation to the US on the US persons and accounts at their institutions
It is not just the US taxpayer that must report but foreign institutions have been placed in the position to report too.
Penalties just to start
Up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a potential maximum penalty of $60,000; criminal penalties may also apply
To report my accounts where should I start?
You should start with the first year that the account reporting was required. The Form 8938 would be completed and an amended return filed for tax year 2011. Then you would completethe FBAR form 90-22.1 for every year and send that in
The 2 forms are different but one does not cancel out the other.
The 8938 is filed with the tax return an dthe 90-22.1 is sent on it's own.
If you have earned interest on the account and reported as income then you will fair better in not being penalized for not filing.
If you did earn interest and did not include that as income then amend the return to correct that.
I would suggest you seek a tax professional to assist you if you normally do your own return.
If you have been using a professional then contact them and bring them up to date on your account
I can offer a link to the IRS Treasury page that answers questions on this subject.
Thank you for your help
You are most welcome. Your positive rating is always thanks enough.