International & Offshore Tax Compliance
Globalization is a fact of life in our modern economy, and cross-border activities have become the norm, not the exception. Freeman Law provides experienced counsel with respect to international and offshore tax compliance. We help clients manage, understand, and comply with the tax requirements that come with holding foreign assets; engaging in inbound and outbound cross-border transactions; maintaining ongoing business operations in foreign countries; and various other international complexities.
Founding and Managing Member, Jason Freeman, is a frequent speaker on international taxation and related issues, including compliance with information return and Foreign Bank Account Report (“FBAR”) filing requirements, the Offshore Voluntary Disclosure Program, the Streamlined Filing Compliance Procedures, and other compliance initiatives and requirements. We regularly assist clients with these programs and filing requirements, helping them take proactive steps to come into compliance and mitigate their risks. We also represent clients who may be facing audits or prosecution related to foreign tax and FBAR reporting deficiencies.
With recent legal developments such as the Foreign Account Tax Compliance Act (“FATCA”) and the expansion of Information Exchange Agreements among countries around the world, the flow of information and reporting to the IRS and the coordinated enforcement by taxing authorities has never been greater. For many, that means that the risks of non-compliance have never been more real. Freeman Law can help businesses and individuals manage these critical tax risks and make sense of complex international tax compliance rules.
International & Offshore Tax Compliance FAQs
What is FBAR?
An FBAR is the Foreign Bank Account Report, (also known as FinCEN Form 114.) If you're in the reporting threshold, you submit it yearly. The Foreign Bank Account Report exists to combat tax evasion, specifically reporting money and assets in foreign banks.
Is FBAR mandatory?
The FBAR is required for “United States persons” who meet the reporting threshold. The term “US persons” refers to citizens, trusts, estates, domestic entities, and resident aliens.
Who Must File the FBAR?
A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.
What is the maximum account value in FBAR?
If the maximum account value of a single account or aggregate of the maximum account values of multiple accounts exceeds $10,000, an FBAR must be filed.
What is FATCA?
FATCA stands for Foreign Account Tax Compliance Act. Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. There are serious penalties for not reporting these financial assets.
What does FATCA compliance mean?
FATCA requires certain U.S. taxpayers who hold foreign financial assets with an aggregate value of more than the reporting threshold (at least $50,000) to report information about those assets on Form 8938, which must be attached to the taxpayer's annual income tax return.
Do I need to file FBAR every year?
You need to file an FBAR every year that the aggregate account balance of all foreign financial accounts is more than $10,000 USD at any time during the calendar year.
Can the IRS see my foreign bank account?
Yes, the expansion of Information Exchange Agreements among countries around the world, the flow of information and reporting to the IRS, and the coordinated enforcement by taxing authorities has never been greater and the IRS will be able to discover your foreign bank accounts.
What is the Streamlined Foreign Offshore Procedure (SFOP) Program?
The Offshore Voluntary Disclosure Program is an IRS (Internal Revenue Service) program designed to help businesses and individuals who have willfully failed to report foreign income or foreign assets. In SFOP, a U.S. Citizen or Green Card holder who has lived outside of the United States for at least one of the last three years can amend up to three years of their tax returns. All penalties and fees for late payment will be waived.