The United States taxes its citizens and its resident aliens on their worldwide income. U.S. taxpayers are required to report their foreign income on their U.S. income tax return. They must also answer a series of questions on Schedule B to their U.S. income tax return asking them about foreign financial accounts. Failure to perform these reporting obligations subjects the taxpayer to civil penalties, and to potential criminal prosecution.
A U.S. taxpayer with foreign accounts totaling more than $10,000 in value as of December 31 must report the accounts to the IRS by the ensuing June 30. Failure to file an FBAR, or omission of an account from a filed FBAR is punishable by a fine of up to $10,000. But if the failure to file an FBAR or omission of an account from the filed FBAR was willful, the penalty is the greater of $100,000 or 50 percent of the value of the accounts required to be filed on the delinquent FBAR, or of the value of the accounts omitted from the filed FBAR.
If you’d like more information about Foreign Asset/Income reporting services please contact us!