HOUSTON FOREIGN ACCOUNT TAX ATTORNEYS
If you have foreign accounts or assets, it's imperative that you are in compliance with all IRS foreign asset reporting requirements. The experienced tax team at our Houston office on Smith Street will handle all required forms and filings. If necessary, we will handle all communication with the IRS and other governmental agencies.
The tax laws concerning foreign accounts and assets can be quite confusing. The Houston tax attorneys and accountants at Freeman Tax Law will review your financial holdings, and help determine the best course of action for your specific situation.
Find out more about our Houston area foreign account tax services below - or contact us now to schedule a free, totally confidential consultation.
FOREIGN ASSET REPORTING FOR HOUSTON RESIDENTS
If you have money or assets in a foreign country, you need to make certain that you are in compliance with all of the reporting requirements of the IRS. Our experienced San Diego attorneys will make sure you:
- Protect Your Assets
- Insure All Reporting Requirements are Met
- Avoid All Civil & Criminal Liability
WHAT FOREIGN ACCOUNT REPORTING IS REQUIRED?
The two major areas of Foreign Account reporting are covered by FBAR and OVDP. Both of these topics are discussed below.
WHAT IS FBAR?
The U.S. requires certain taxpayers who have a financial interest in, or signature authority over foreign financial accounts to report these accounts on an annual basis to the Department of Treasury. FinCEN Form 114, Report of Foreign Bank and Financial Accounts - commonly called FBAR - has to be electronically filed through FinCEN's BSA e-filing system. Accounts that must be reported includes bank accounts, mutual funds, trusts, and brokerage accounts.
WHO MUST FILE FBAR?
A U.S. taxpayer or resident is required to file an FBAR if:
The person had a financial interest in or signature authority over (or any other authority over) at least one financial account located outside of the United States and, the aggregate value of all foreign financial accounts exceeded $10,000 at any time during a calendar year.
For tax purposes, U.S. persons include U.S. citizens and residents. It also includes entities, such as corporations, partnerships, and limited liability companies created or organized in the United States.
A person with "signature authority" is a person who can control the disbursement of money or other property in the account using his or her signature. A person with "other authority over an account" is a person who can exercise power over an account by communicating directly, orally or otherwise, to the financial institution or other person maintaining the account.
PENALTIES FOR NOT FILING FBAR
People required by law to file an FBAR who do not do so, or who do not do so accurately, may be subject to civil penalties for negligence, nonwillful violations, and willful violations. Below are the penalties that may be executed for willful and nonwillful violations:
Nonwillful violations - A penalty, not to exceed $10,000, may be imposed on any person who violates or causes any violation of the FBAR filing and recordkeeping requirements that are not due to reasonable cause (Internal Revenue Manual (IRM) §220.127.116.11.4).
Willful violations - Persons who willfully fail to report an account may be subject to a penalty equal to the greater of $100,000 or 50% of the balance in the account at the time of the violation, for each violation, under 31 U.S.C. Section 5321(a)(5) (IRM §18.104.22.168.5). Willful violations may also be subject to criminal penalties under 31 U.S.C. Section 5322(b) or 18 U.S.C. Section 1001.
WHAT IS OVDP?
Over the years, the IRS has offered several formal offshore voluntary disclosure programs (OVDP). These programs have allowed qualifying taxpayers with previously undisclosed foreign accounts and assets to come forward and voluntarily disclose those accounts in exchange for potentially reduced penalty charges.
In June 2014, the IRS announced several major changes to the Offshore Voluntary Disclosure Program (OVDP), including increasing the offshore penalty from 27.5% to 50% for certain accounts. At the same time, the IRS expanded its streamlined filing compliance procedures, which offer an alternative (and generally less expensive) route to disclosure for those taxpayers willing and able to certify that their failure to report the foreign assets and pay any resulting tax was not willful.
If you have questions concerning your eligibility in regards to the various IRS OVDP programs, please contact us. We would be happy to discuss the various options that may be available to you.
HOUSTON FOREIGN ACCOUNT HELP
Freeman Tax Law is a comprehensive international tax firm, comprised of a full-service team of Attorneys, CPA's and former IRS agents.
We have handled hundreds of offshore disclosure cases, and will help you understand your obligation in regards to the receipt of foreign gifts and bequests. We will clearly explain your options in making all necessary disclosures to the IRS.
Houston Office of Freeman Tax Law
1200 Smith St. #1600-2
Houston, TX 77002
Federal and state laws change frequently. For current tax or legal advice, an attorney or CPA should be consulted. The information contained in this article is not exhaustive, and is not a substitute for competent legal advice. If you have a question concerning a foreign account or offshore holdings, please contact us. The initial consultation is always free, and of course all communication will be confidential.
ATTORNEY - CLIENT PRIVILEGE
The attorney-client privilege is one of the oldest American privileges for confidential communications. All communications with Freeman Tax Law regarding a legal issue will be treated with the strictest confidence and protected under the attorney client privilege.