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.
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.
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 Confidentiality has been replaced by disclosure to the IRS as of 2009.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.
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.