The IRS has released Fact Sheet 2014-7 with detailed information on reporting laws for taxpayers with foreign accounts.  It advises taxpayers with foreign accounts to answer Part III of Schedule B.  Those whose account values exceed certain thresholds are required to attach Form 8938 to their tax returns. Taxpayers are also required to file an electronic FBAR report through FinCEN’s BSA E-Filing System by June 30 every year if the account values exceed $10,000 at any point during the year.  Failure to file Form 8938 can lead to a maximum of $60,000 in penalties, while failure to file an FBAR report can lead to penalties equal to $100,000 or half of the value of the accounts, whichever is greater.  To avoid these and possible criminal penalties, taxpayers should consider the revised Offshore Voluntary Disclosure program.

See “Offshore Income and Filing information for Taxpayers with Offshore Accounts,” Internal Revenue Service, FS-2014-7 (June 18, 2014)

With thanks to “Fact Sheet Provides Income Filing Information for Off-Shore Accounts,” Tax Analysts, 2014 TNT 118-20 (June 19, 2014)

Posted by David Staggs, Associate Editor, Wealth Strategies Journal