10 IRS Rules for Stress-Free Foreign Accounts
It is common to wonder if closing a foreign bank account can solve disclosure problems. Unfortunately, it can’t. As numerous prosecutions make clear, the stakes have never been higher and the potential liabilities can be staggering. Consider the following 10 rules:
- You Must Report Worldwide Income.
- FBARs Too.
- With your tax return, you may also need to file an IRS form 8938
- Failures can be considered tax evasion and fraud. The criminal statute of limitations is six years.
- FBAR Penalties Are Worse. The penalty for failing to file an FBAR is $10,000 for each non-willful violation.
- You Can Even Go To Jail. Tax evasion can carry a prison term of up to five years and a fine of up to $250,000
- Voluntary Disclosure Is Still An Option.
- “Quiet Disclosures” Are Discouraged.
- Prospective Compliance Only Is Risky.
- Disclosure Is The Key.
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