IRS REQUIREMENTS AND PENALTIES FOR DISCLOSING OFFSHORE BANK ACCOUNTS

What is an Offshore Account and How Do I Disclosure Mine?

Reporting an “offshore” bank account is imperative if a U.S. taxpayer has international assets.

The Internal Revenue Service (“IRS”) appears to be increasing the number of IRS small business audits they are issuing, which has had an effect on businesses in Boston and throughout Massachusetts. According to their website, the IRS audited almost one million taxpayer’s 2017 tax return. In addition, the IRS appears to be becoming stricter in their review of small businesses and their finances. What triggers an IRS small business audit? The IRS will issue an IRS small business audit for a multitude of reasons, not just when they are suspicious of a small business’s their tax returns or financial activity. This means that even companies with nothing to hide could be at risk for an IRS small business audit. Even if a crime has not been committed, an IRS Small business audit can be a traumatic experience for those who do not seek the proper guidance. If you want to avoid the devastating consequences an IRS small business audit can have, you need to hire the proper Boston tax lawyer to guide you and your business through it. Thorn Law Group can help.

In 2010, the Foreign Account Tax Compliance Act (FATCA) was passed by Congress and signed into law. The purpose of FATCA was to crack down on the use of offshore accounts to evade taxes. While FATCA has likely accomplished this goal, it has also made life much more difficult for American expatriates.

For U.S. taxpayers receiving foreign income, it is essential to be aware of the American tax requirements for such income. The United States is the only major country that taxes its citizens and permanent residents on income earned anywhere in the world. When faced with such an aggressive government stance on foreign income, U.S. taxpayers receiving foreign income must be certain they are in legal compliance.