FATCA / FBAR Compliance



If taxpayers have non-compliant foreign accounts and unreported foreign income, they may still apply for “tax amnesty” through the IRS Offshore Voluntary Disclosure Program (“OVDP”). Taxpayers may also be qualified for other programs like the Streamlined Offshore Procedures and the Delinquent Filing Submission Procedures. Through these programs, taxpayers have been able to reach compliance with their foreign accounts.

FATCA, FBAR Compliance, Tax Amnesty

FBAR reporting has become a major project with the IRS over the years. FBAR compliance checks and harsher penalties have become more frequent which suggest the IRS is taking FBAR reporting seriously. Financial Institutions are going to institute a reporting and withholding establishment commissioned by the Foreign Account Tax Compliance Act (“FACTA”).

“Tax Amnesty” is still a possibility for taxpayers with non-compliant foreign accounts and unreported foreign income. This is through the Internal Revenue Service’s Offshore Voluntary Disclosure Program (“OVDP”). Taxpayers may also qualify for the Streamlined Offshore Procedures and the Delinquent Filing Submission Procedures. These programs have already helped thousands of taxpayers come into compliance. Foreign account reporting has become an important priority with the IRS. Harsher penalties and compliance enforcement have become more frequent.

Financial institutions will begin a reporting and withholding regime created by the Foreign Account Tax Compliance Act (“FATCA”). Under FACTA, financial institutions will be required to collect information on account owners. These new regulations will also require these institutions to withhold U.S. taxes on earnings from certain accounts. The next stage in international tax enforcement is likely to acquire the international communities’ cooperation.

The Bank Secrecy Act requires that a FINCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), be filed if the aggregate balances of all foreign accounts exceed $10,000 at any time during the year. The FBAR covers a calendar year and must be filed no later than June 30th of the following year and includes any interest a U.S. person has in a foreign financial account.

Boyle Frost also assist with inquiries from the Office of Foreign Asset Control (OFAC) and matters involving Specially Designated Nationals (SDN).

Our Experience Includes:

1) Passive Foreign Investment Company “PFIC” Reporting (Form 8621)

  1. a) Section 1291
  2. b) Mark-to-Market
  3. c) Qualified Electing Fund (QEF) Election

2) Statement of Specified Foreign Financial Assets (Form 8938)

3) U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans (Form 8891)

4) Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts (Form 3520)

5) Information Return of U.S. Persons With Respect To Certain Foreign Corporations (Form 5471)

6) International Boycott Report, (Form 5713)

7) Information Return of a 25% Foreign-Owned U.S. Corporation (Form 5472)

Boyle Frost can help you bring your foreign bank accounts into compliance and assist with your FBAR filing obligations. This may also help to lessen the chance of a criminal investigation or harsh civil penalties. It is imperative that you retain an experienced attorney to lead you through the complicated rules of the IRS, safeguard you from criminal prosecution and curtail the financial impact of possibly paying penalties and taxes. Contact us today for a consultation; we would be more than happy to discuss your situation with you.