U.S. law requires citizens and permanent residents to disclose foreign holdings annually. And for several years, parties that previously failed to report overseas' holdings could "come clean" via the Offshore Voluntary Disclosure Program (OVDP). But officials are shuttering the program. The amnesty period is coming to a close. So, if you have bank accounts, trusts, or other financial holdings in other countries, and you've yet to comply with annual reporting requirements, get on it ASAP! Failing to do so could cost you up to 75% of your foreign holdings, plus a lengthy prison sentence.
If you have five dollars in an offshore bank account, don't worry about FBAR regulations. The Offshore Voluntary Disclosure Program is for individuals and businesses with a total of $10,000 or more, at any time during the year, in foreign financial holdings. So, let's say you typically keep $8,000 in an Indian bank account. This year, however, you had $10,005 in the account for one month. Because of that one month wherein your total overseas holdings were equal to or above $10,000, you're bound to foreign financial reporting rules for the year.
Like personal and business income tax filing, IRS forms, regulations, and processes can be extremely complex to understand. The OVDP can be even more complex, especially considering tax obligations you might already have for assets within the borders of the county in which the assets are housed. This is why, if you have a foreign asset, you should seek the assistance of an experienced Chicago OVDP lawyer to help mitigate problems before they flourish.
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Anyone with more than $10,000 in overseas assets must comply with Foreign Bank and Financial Accounts Reporting (FBAR) regulations.GO »