For parties with foreign holdings, reporting them, via the FBAR (Foreign Bank Account Reporting) process, is an essential part of the tax disclosure process. Having foreign accounts is fine, so long as you report their value annually to the United States government. Following proper procedures will keep you in the legal clear and sometimes more money in your control.
It's exceptionally rare to be thrown in jail for not previously disclosing overseas assets. That said, it's possible. Bottom line: the IRS does not take kindly to evasion. Voluntary disclosure can seem scary and long, but it's a much better option than hiding the account. Choosing this option allows you to come clean, possibly save on taxes and fees, as well as avoid criminal prosecution.
During the voluntary disclosure process, the IRS will ask questions about your overseas accounts. Primarily, the agency will examine two main things:
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Dealing with an overseas account can be challenging. Consider hiring a tax professional to help with the process. Whether the IRS has found your overseas account or you're ready to do a voluntary disclosure, a tax professional can help with FBAR requirements and get things in order for you. With all of the changes the IRS requires with FBAR filing, it is easy to get lost in the shuffle. Give us a call at (847) 580-1279 — the sooner we get started, that's one less headache you'll have to worry about.