Thanks to improved technology, communication, and transportation, people are finding rewarding opportunities all over the world. Unfortunately, as traditional boundaries come down, newer and more complex concerns take their place. One of these concerns is offshore tax evasion.
Finding Overseas Tax Havens
Big-screen adaptations of Ian Fleming’s spy novels popularized the secretive overseas (often Swiss) bank accounts. The idea was that America’s rich and famous—while they were off sipping martinis in their own private islands—took advantage of large untaxed capital sitting in hidden accounts around the world.
If it’s a case of life imitating art or the other way around, one can’t be too sure. One thing is clear, though: over the years, more incidents of offshore tax evasion have been recorded—the most famous being the Swiss banking scandals in 2009. A few years later, the Internal Revenue Service (IRS) decided it has had enough.
Cracking Down on Evaders
The Foreign Account Tax Compliance Act (FATCA) was signed into law in 2010. The act requires U.S. taxpayers—residents and expatriates alike—with offshore assets to disclose detailed information of their foreign bank accounts to the IRS. Information includes income derived from these accounts.
Those who withhold or fail to report accurate account information can face major penalties. Underreporting is considered a serious offense, but there may be breathing room for taxpayers who unintentionally made errors. It’s up to the individual to the prove their innocence to the IRS examiner.
Avoiding Tax Penalties
Leading FATCA consultants in Reston, VA, believe that because the act only became fully effective in July of last year, the strict provisions may still be difficult to navigate for some. The penalties are stiff too—steep fines at best and criminal prosecution at worst.
If you have an undisclosed overseas account, asset, or income, you best be speaking with a tax expert promptly. Experienced consultants can help you investigate, document, or file the required IRS forms and reports. In the event that you have made an innocent error in your reports, it makes sense to have a professional represent you in the U.S. Tax or District Courts.
Some taxpayers participate in the Offshore Voluntary Disclosure Program (OVDP) to get lighter penalties. The 2014 amended program was designed to help those who did not willfully commit an offense (by unintentionally failing to accurately report a foreign account, for example). The program has been proven to work in many cases.
US International Tax Advisors has helped several DC, Maryland, and Virginia clients with international tax issues, including outstanding FATCA cases. We represent participating taxpayers, trusts, and estates in the IRS Voluntary Disclosure Program in Reston, VA, and surrounding areas.
We’ll help you resolve even the toughest tax compliance issues. Give us a call at (844) 796-8565 today to get the process started.