Undisclosed Offshore Bank Accounts: You Must Take Action Immediately

The IRS has issued strong messages to those with offshore bank accounts. You must disclose your offshore accounts or risk heavy financial penalties and possible imprisonment. The penalties are even hefty for those who unwillfully (by accident; not deliberate) failed to disclose their offshore account.
Penalties for those who willfully fail to report their offshore accounts are certainly worse. Under the statute, these penalties are larger than $100,000 or 50% of the highest balance in your account and likely imprisonment. If you have not done so, you need to electronically submit FinCEN Form 114 by the 15th of this month (October). (https://www.fincen.gov/report-foreign-bank-and-financial-accounts)
The United States has created agreements with at least 40 countries around the world to provide automatic exchange of financial information concerning offshore bank accounts of all persons considered US tax residents under the Foreign Bank Account Report (FBAR). Through these international agreements, the IRS has the authority to force those with overseas bank accounts to disclose those accounts with cumulative balances that exceed the threshold of $10,000.
How to Report Your Offshore Bank Account if You Failed to Properly Report It
Many Americans discover after it is too late that they have not taken the required steps of disclosure by the IRS with their offshore accounts. You may have to face severe penalties if you failed to account for your foreign income. However, avoiding taking action is the worst thing you can do.
In addition to filing FinCEN From 114, you need to do the following:
• Specify all of your foreign income on Schedule B of your tax return
• File a delinquent FBAR submission and a streamlines disclosure to the IRS. Make sure you correctly follow the voluntary disclosure steps. A tax attorney should be able to help you with this. (Use the same link provided earlier in this article)
• Find or get with an experienced accountant and tax attorney to ensure the accuracy of your information and to help determine the right strategy for your situation.
If you have questions concerning disclosing your foreign bank account, we welcome you to contact our office.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.protaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.