FBAR, FATCA Compliance -Tax Attorneys, Tax Lawyers , CPAs 1-866-700-1040
Now is the time to move forward because Big Brother is watching, they have signed treaties, sharing international information and are about to drive a stake through the heart of financial pocketbooks with the fear of prison time.
The law and numbers are on there side.
The Department of Justice and the Internal Revenue Service in the last three years has collected over $6 billion in offshore funds hidden and disguised in financials institutions overseas.
Within the last year there will be sweeping changes in the International financial markets as countries are sharing their data with most governments.
Governments plan to empty the pocketbooks of taxpayers and persons who have been hiding in disguising their money and they plan to attack them with large penalties and some of them in the hotel fed.
The New Program – International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
1. Is based on business requirements collected by a multilateral working group
Serves as a single point of FATCA information delivery for both FIs and HCTAs,
2. May be used for automatic exchange with all FATCA jurisdictions,
3. Is based on readily-available mature technology,
4. Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
5. Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
I cannot stress the urgency of moving forward quickly.
As a general rule if you contact the proper government agency first, it is very likely there will be no criminal prosecution, not guaranteed of course, but the likelihood is on your side.
Some information you should know:
Report of Foreign Bank and Financial Accounts (FBAR)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). See the ‘Who Must File an FBAR’ section below for additional criteria.
Current FBAR Guidance FinCEN introduces new forms
On September 30, 2013, FinCEN posted, on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form).
FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.
The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114.
It also offers an option to “explain a late filing,” or to select “Other” to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.
On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf.
The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request.
Filing deferral for certain individuals with signature authority only, effective through June 30, 2015
FinCEN Notice 2013-1 extended the due date for filing FBARs by certain individuals with signature authority over, but no financial interest in, foreign financial accounts of their employer or a closely related entity, to June 30, 2015.
FATCA Information for Individuals
U.S. citizens, U.S. individual residents, and a very limited number of nonresident individuals who own certain foreign financial accounts or other offshore assets (specified foreign financial assets) must report those assets.
You should use Form 8938 to report these assets.
Attach Form 8938 to the annual income tax return (usually Form 1040).
Taxpayers with a total value of specified foreign financial assets below a certain threshold do not have to file Form 8938
If the total value is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year, unless the total value was more than $75,000 at any time during the tax year.
The threshold is higher for individuals who live outside the United States.
Thresholds are different for married and single taxpayers.
Taxpayers who do not have to file an income tax return for the tax year do not have to file Form 8938, regardless of the value of their specified foreign financial assets.
There are penalties apply for failure to file accurately.
Alert:
The reporting requirement for Form 8938 is separate from the reporting requirement for the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”) (formerly TD F 90-22.1). An individual may have to file both forms and separate penalties may apply for failure to file each form.
Third-party reporting:
Foreign financial institutions may provide to the IRS third-party information reporting about financial accounts, including the identity and certain financial information associated with the account, which they maintain offshore on behalf of U.S. individual account holders.
Application to domestic entities:
The IRS anticipates issuing regulations that will require a domestic entity to file Form 8938 if the entity is formed or used to hold specified foreign financial assets and the total asset value exceeds the appropriate reporting threshold.
Until the IRS issues such regulations, only individuals must file Form 8938.
International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
1. Is based on business requirements collected by a multilateral working group
Serves as a single point of FATCA information delivery for both FIs and HCTAs,
2. May be used for automatic exchange with all FATCA jurisdictions,
3. Is based on readily-available mature technology,
4. Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
5. Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
FBAR, FATCA Compliance Representation – Expert Tax Attorneys, Tax Lawyers, CPAs * 1-866-700-1040
