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FATCA, FBAR, & IRS Amnesty

Offshore Banking Defense

The IRS and the Department of Justice aggressively pursue unreported offshore accounts and other assets. Citizens and residents of the United States are required to report offshore bank accounts if the balance exceeds $10,000 at any time during the year. Different forms are required for offshore accounts and offshore assets, interests in trusts and certain types of corporations.

At the Law Offices of Horwitz & Citro, P.A., our offshore banking defense lawyers are available to provide experienced counsel and representation in matters that involve:

  • Report of Foreign Bank and Financial Accounts (FBAR): The law requires offshore account holders to file a Report of Foreign and Financial Accounts, FinCEN Form 114; formerly Form TD F 90-22.1 (prior form commonly called FBAR).
  • Statement of Specified Foreign Financial Assets: The Foreign Account Tax Compliance Act (FATCA) also requires U.S. taxpayers to report foreign financial assets with an aggregate value of over $50,000 to over $600,000. The amount which triggers the filing requirement depends upon whether the tax payor is single or married, filing joint returns or separate income tax returns, and resides in the U.S. or a foreign country. For example, a married couple filing a joint return who resides outside the U.S. must file a report of foreign assets if the total value of assets exceeds $400,000 on the last day of the year or more than $600,000 at any time during the year. FATCA requires the filing of Form 8938 (Statement of Specified Foreign Financial Assets) every year with the income tax return.
  • Other Filing Requirements: U.S. citizens and residents may be required to file other forms depending upon their situation. Such other forms include Annual Return to Report Transactions with Foreign Trusts (Form 3520); Information Return of Foreign Trust With a U.S. Owner (Form 3520-A); and other forms relating to foreign corporations and partnerships.

Tax Evasion & Offshore Accounts

The government's efforts are designed to stop tax evasion by those who fail to report income from offshore accounts and other assets. If the government discovers offshore accounts with unreported income, the consequences can be severe. A person who willfully does not disclose income earned outside the United States faces criminal charges of tax evasion in addition to failure to file the FBAR (now FinCEN Form 114) if the account or accounts exceed $10,000.

The IRS and the Department of Justice are seeking to stop tax evasion and target unreported offshore banking as one of the “Dirty Dozen” forms of tax cheating. The efforts were two-fold. First, by pressuring offshore banks to disclose American account holders; and second, by offering amnesty from criminal prosecution and reduced civil penalties for citizens who voluntarily disclose the offshore accounts under the 2014 Offshore Voluntary Disclosure Program (OVDP). However, the IRS is doing away with the OVDP as of September 28th, 2018. The ending of the OVDP will result in an increase in civil audits as the offshore banks report U.S. customers to the IRS. In addition, many of these audits will lead to criminal prosecutions if not handled carefully.

How Can We Help You?

Our nationwide federal criminal defense attorneys are ready to help those whose information has already been provided to the IRS by the offshore banks. We have represented clients throughout the country who face the prospect of criminal prosecution for unreported offshore accounts and income. Our clients have had offshore accounts in many different countries including Switzerland, France, China, South Africa, Canada, Malaysia, Singapore, Bermuda, Spain, Belize, Bahamas, UK, Colombia, Ireland, Italy, Saudi Arabia, Portugal, and Hong Kong. We are also in a position to assist those who know that their offshore financial institutions are being pressured by the United States to provide the offshore bank records.

Many times, clients across the United States who come to the Law Offices of Horwitz & Citro, P.A., have inherited a foreign bank account from a parent or grandparent. This is a common situation, and we can help you avoid criminal penalties and heavy civil penalties.

How Do I Know if I Need to Report?

Offshore bank accounts must be reported under U.S. law. All offshore bank accounts must be reported yearly if the account or accounts total more than $10,000. Additionally, earnings on offshore accounts must be reported to the IRS. Willful failure to report offshore bank accounts and earnings such as dividends, interest, and stock trading profits, are felonies that can result in imprisonment.

What if My Bank Is Providing My Records to the IRS?

The importance of retaining an experienced criminal tax defense attorney is even greater when the IRS learns of unreported offshore accounts and assets. The IRS is conducting civil audits based upon failure to report offshore bank accounts. These civil audits can turn into a criminal investigation followed by a criminal case and a long prison sentence.

IRS audits will begin with letters from IRS representatives setting a meeting to discuss the failure to file FinCEN Form 114 (still commonly referred to as FBARs) reporting offshore accounts and a second letter concerning the failure to file Form 8938, Statement of Specified Foreign Financial Assets. The IRS letters and subsequent meetings with IRS civil agents do not disclose the potential of a criminal investigation and prosecution growing out of the audit. The IRS letter is worded to appear to be only a civil audit. The need for a criminal defense attorney experienced in criminal tax defense cannot be overstated.

Do I Still Need To Report My Income If I Will Not Owe Taxes?

U.S. citizens and noncitizen residents must report all income on their U.S. tax returns, regardless of where that income was earned. If you are a U.S. citizen working overseas, you must report your income to the IRS even if your income is taxed in the foreign country.

Credits and deductions may mean that you do not owe taxes, but you are still required to report income. If you fail to report your foreign income, you can face criminal penalties. The IRS has specially trained examiners who are focused on pursuing violations of this and similar tax crimes such as failing to report foreign investments and foreign bank accounts over $10,000. IRS agents will anticipate that those working offshore have offshore accounts which must be reported, if over $10,000.

Contact Our Nationwide Offshore Banking Defense Lawyers

If you have a foreign account or accounts or unreported offshore assets, it is important that you work proactively to protect yourself from civil and criminal consequences.

Contact the Law Offices of Horwitz & Citro, P.A., online or call (407) 901-5852 to schedule a consultation with one of our skilled criminal defense lawyers. Skype or Signal conferences can also be arranged.

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