Offshore Account / Foreign Bank Account Reporting (FBAR)
New Jersey Offshore Bank Account Attorney
At Thorn Law Group our legal professionals work with clients across the nation and abroad to bring their foreign bank accounts and assets into compliance with U.S. laws and regulations. Our experienced offshore bank account attorneys represent individual taxpayers, professionals, banks, small and large companies, partnerships and other entities throughout New Jersey, New York, Connecticut and Pennsylvania dealing with complicated offshore account reporting obligations.
We are highly regarded across the United States and abroad for our sophisticated legal skills and ability to help taxpayers successfully resolve their complex foreign account issues with the Internal Revenue Service.
The legal team at Thorn Law Group carefully monitors and analyzes the developing body of laws addressing offshore accounts and foreign banking activities. As former trial attorneys with the IRS, our legal professionals have first-hand knowledge of how the government investigates and pursues suspected tax law violations, including the failure to disclose offshore accounts and other attempts to evade U.S. tax obligations.
Our New Jersey offshore bank account lawyers focus on bringing our clients’ unreported overseas accounts into full legal compliance as rapidly as possible while minimizing penalties and other negative consequences associated with their undisclosed accounts.
Foreign Bank and Financial Accounts Program (FBAR) and Other Reporting Obligations
U.S. taxpayers holding offshore accounts are required to disclose their accounts and report any income derived from such foreign accounts to the Internal Revenue Service. In recent years the IRS has stepped up its efforts to identify and pursue taxpayers who have failed to report their foreign bank accounts and engaged in other offshore activities designed to avoid U.S. tax obligations.
The United States Foreign Bank and Financial Accounts Program (FBAR) sets forth strict annual reporting requirements for all U.S taxpayers holding a “financial interest in or signature authority over a foreign financial account” exceeding a $10,000 dollar threshold amount. Under the FBAR program, “foreign financial accounts” include but are not limited to bank accounts, trusts, mutual funds, and brokerage accounts. Taxpayers maintaining such accounts must file a yearly Report of Foreign Bank and Financial Accounts (FinCen Form 114 which supersedes the earlier FBAR form 90-22.1) on or before June 30th of each year.
Individuals and businesses who fail to comply with FBAR reporting requirements can be subject to a civil penalty of up to $10,000 dollars for each non-willful violation. In the event the government finds that the taxpayer acted willfully, the penalty may be increased up to $100,000 dollars or fifty percent of the account balance at the time of the willful violation.
In addition to the civil fines, taxpayers may also be subject to criminal investigation. Due to the severity of such penalties, taxpayers holding overseas accounts should consult with an experienced New Jersey offshore bank account lawyer to determine whether they are properly complying with FBAR reporting requirements.
In addition to the FBAR form, taxpayers holding certain foreign financial assets exceeding a threshold amount must also file IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their annual U.S. income tax return. Individual taxpayers who fail to file Form 8938 may face a civil penalty of up to $10,000 dollars (which can increase to a maximum of $60,000 dollars in the event the taxpayer fails to comply after receiving notification from the IRS), along with the possibility of being subject to criminal penalties.
Moreover, taxpayers holding an interest in and/or conducting certain transactions with offshore corporations or foreign trusts may be required to file additional annual forms with the IRS, including Forms 5471, 3520 and 3520A.
Navigating Complex Offshore Account Reporting Requirements
The legal team at Thorn Law Group recognizes that the disclosure requirements associated with offshore accounts and other foreign financial activities can be very difficult to comprehend. Our New Jersey offshore bank account lawyers help clients navigate these complex rules and procedures and regularly represent clients who have failed to properly comply with their IRS reporting obligations.
We have helped hundreds of clients come into offshore tax compliance by successfully participating in the IRS Offshore Voluntary Disclosure Program. This federal tax amnesty program offers U.S. taxpayers with previously undisclosed foreign accounts the opportunity to avoid the most severe penalties and possible criminal prosecution by coming forward and making a full and voluntary disclosure to the IRS.
If you have concerns about FBAR or other offshore account reporting requirements or would like to learn more about the IRS Offshore Voluntary Disclosure Program, contact Kevin E. Thorn, Managing Partner of Thorn Law Group.