If you own offshore assets, you may have an obligation to disclose them to the Internal Revenue Service (IRS) in 2021. You may also be required to disclose them to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Failing to disclose foreign financial assets can lead to substantial penalties, up to and including six-figure fines and federal imprisonment. Here, Boston offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, provides an overview of the foreign asset disclosure requirements.

Under the federal Bank Secrecy Act, U.S. taxpayers who own offshore accounts with an aggregate value of $10,000 or more in any tax year are required to disclose their offshore accounts using FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR). Taxpayers must file FBARs annually with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), and failing to do so can lead to steep penalties.