How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Robin D. Your Own Question
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15042
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

I have an offshore financial account of over $50,000. Recently

This answer was rated:

I have an offshore financial account of over $50,000.
Recently I hear that there could be a new law in effect beginning next year January that will require make me to report my financial accounts overseas exceeding $50,000.
Is there any such laws that will come into effect next January?
Has there been already such laws that were in effect?
If I don't comply what are the consequences?
Can I just ignore it? How will anyone find out?

Robin D. :

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.


<table border="0" cellspacing="0" cellpadding="0">

child">
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.




  • FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts











 





  • By U.S. taxpayers about certain foreign financial accounts and offshore assets






 





  • By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest







  • The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.





Robin D. :

Before then there was the FBAR reporting using Form 90-22.1

Robin D. :

Can I just ignore it? No
How 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

Robin D. :

It is not just the US taxpayer that must report but foreign institutions have been placed in the position to report too.

Robin D. :

Penalties just to start

Robin D. :

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

Customer:

To report my accounts where should I start?

Robin D. :

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

Robin D. :

The 2 forms are different but one does not cancel out the other.

Robin D. :

The 8938 is filed with the tax return an dthe 90-22.1 is sent on it's own.

Robin D. :

If you have earned interest on the account and reported as income then you will fair better in not being penalized for not filing.

Robin D. :

If you did earn interest and did not include that as income then amend the return to correct that.

Robin D. :

I would suggest you seek a tax professional to assist you if you normally do your own return.

Robin D. :

If you have been using a professional then contact them and bring them up to date on your account

Robin D. :

I can offer a link to the IRS Treasury page that answers questions on this subject.

Customer:

Thank you for your help

Robin D. :

You are most welcome.
Your positive rating is always thanks enough.

Robin D. and 2 other Tax Specialists are ready to help you