What Does the IRS Say About Offshore Accounts?

The Internal Revenue Service states the following:

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.


Who Must File an FBAR?

United States persons are required to file an FBAR if:

1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and

2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

I would like to thank Robert J. Fedor and his firm for their exceptional effort in handling my voluntary disclosure through the IRS's Offshore Voluntary Disclosure Initiative (OVDI). After consulting with numerous tax lawyers, I decided to hire Bob due to his experience, confidence, and his comforting manner. During my consultation with him, he clearly laid out the proper course of action, the potential penalties I may incur, and what to expect during the lengthy process. I am extremely pleased to say that Bob successfully navigated me through the OVDI process without having to pay any penalties! I would highly recommend him to anyone that needs IRS representation.

-Alan N., Chicago, IL

We had been working with another law firm for two years trying to get our IRS liability sorted out... two years of frustration and getting nowhere. We left our first meeting with Mr. Fedor, feeling very hopeful and confident that there was light at the end of the tunnel. Mike Arnold worked with us every step of the way - explaining everything completely, answering all of our questions, and knowing exactly what needed to be done to resolve our tax issue. Within six months, Mr. Arnold was calling us with the great news that he had been able to work out a resolution to the issue...where we had owed the IRS over $80,000.00 - we were able to settle with them for less than $2,800.00. Being self-employed in the construction business, this was absolutely the best news we could have ever received! No drawn out payment plans, or numbers that we couldn't even ever think of re-paying. We are so thankful the we found these attorneys, who helped us get our financial life back on track.

-John & Cheryl K., Cleveland, OH

I approached Robert J. Fedor ESQ, LLC in 2012. I had questions regarding my failure to file FBAR forms in a timely fashion. I also had some income from accounts in my home country. The attorney at the firm, Benjamin Heidinger, explained that an OVDI would be best suited in this case. The OVDI process was explained to me and the process began. After the OVDI process; the firm was diligent in filing my new taxes. The firm had thorough knowledge of the current OVDI regulations and were able to help me in filing new tax forms. The firm worked with the IRS agents to accurately determine the OVDI penalty. The follow up with the IRS agents was done in a timely fashion. My case was closed in February of 2014. I am happy with the support that I have received from the firm and I would like to recommend the firm to my colleagues. Thank you for your help, Ben.

-Sunil S., Indianapolis, IN

Recent Changes to Disclosure Requirements

For many years, U.S. citizens and residents holding offshore or foreign bank accounts have not disclosed the existence of their accounts or claimed income from them on their income tax returns. These taxpayers felt comfortable that the U.S. government could not obtain information about their accounts from foreign financial institutions. Over the last three (3) years, things have changed dramatically and those same taxpayers are now subject to potential criminal prosecution. Confidentiality has been replaced by disclosure to the IRS as of 2009. Foreign countries are slowly releasing names to the federal government of those enjoying the benefits of an overseas bank account.

The IRS and the U.S. Department of Justice have focused a great deal of effort on offshore compliance and pursuing criminal and civil penalties against individuals, trusts and corporations who have not disclosed the existence of their offshore accounts or reported the income from these accounts.

This is especially evident in the number of civil and criminal investigations widely covered in the media, including the UBS cases, HSBC and the most recent investigation of Credit Suisse.

Thorough, Up-to-Date Knowledge of Tax Law

At Robert J. Fedor, Esq., LLC, we keep up to date on the continuously changing and evolving rules and regulations related to the IRS offshore initiatives. We will bring your offshore account into IRS compliance and ensure that your voluntary disclosure is processed efficiently, accurately and minimizes your criminal exposure to the IRS. We maintain our numerous contacts within the IRS to ensure that your case is being processed by the correct IRS department and that your matter is attended to in a timely manner.

Once a non-prosecution agreement is reached with the Internal Revenue Service, the attorneys at Robert J. Fedor, Esq., LLC will endeavor to meet all of the voluntary disclosure requirements, including the filing of all amended FBAR returns and amending all required federal income tax returns. All of that work is done in-house.

Consult Our Attorneys

If you have an offshore account that you have not previously disclosed to the IRS, we urge you to contact our law firm for a confidential consultation with Robert J. Fedor, Esq. Call 800-579-0997 to learn more, or to arrange to meet one of our lawyers at our office in Cleveland, Ohio.

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