FBAR – FOREIGN BANK ACCOUNTING REPORTING
Several high net worth businesses owners or individuals looking for a tax break use offshore accounts to keep their money and financial assets safe. Although offshore accounts are a legal way to protect your financial assets, they are seen as less secure than federally insured funds housed in U.S. banks. Additionally, there are several more Foreign Bank Account Reporting (FBAR) issues that require to be dealt with.
There are several conditions when offshore accounts are favorable:
- Offshore limited liability companies and corporations are often set up for international trading and asset protection and can help manage taxes on foreign income. There are specific tax flexibilities and benefits that are allowed for these offshore accounts. It is best to seek advice from an IRS attorney to establish what legal benefits these accounts can offer.
- Trusts set-up offshore are typically part of an estate planning process and can help keep current and future creditors at bay. This is a perfect way to protect funds for family descendants and heirs. An offshore trust is beneficial, as it can remain confidential to other parties.
- Private foundations established offshore operate much in the same way as a trust, and operate like a company. If they are offshore, they can be confined against excess taxation and the claims of creditors.
Due to the sophistication of the FBAR necessities associated with having an offshore bank account, it is best that you consult with a competent IRS tax attorney. LA Tax Law is led by a former IRS lawyer, Mouris Behboud, who has represented the government for over eight years. Currently, he is here to give you advice on your next financial step. Contact Morris now to get answers to your offshore account queries.
Offshore account penalties:
Though offshore accounts seem like a smart way to secure some of your financial assets, if you use these accounts to illegally hide your funds or income from the U.S. government, you could end up in a compromising situation.
If you have offshore accounts, hidden foreign income or are accused of tax evasion, your money could remain untouched, but you could still face the likelihood of criminal prosecution and additional fines.
Criminal charges related to tax returns include:
- 5 years of imprisonment and fines of up to $250,000 for Tax Evasion (26 U.S.C. § 7201);
- 3 years of imprisonment and fines up to $250,000 for filing a false return (26 U.S.C. § 7206(1);
- 1 years of imprisonment and fines up to $100,000 for refusal to file an income tax return (26 U.S.C. § 7203);
- 10 years of imprisonment and fines up to $500,000 for refusal to file an FBAR or the filing of a false FBAR (31 U.S.C. § 5322).
If you have an offshore account that requires FBAR, Let one of our experienced former IRS tax lawyers help run your assets and make sure that due diligence is completed. Any one of our IRS attorneys can offer you with free one on one consultation to discuss your options and set up a custom plan that will work for you. Contact us now. We can help. Contact us now at 310-883-7930.
If you want to find out what the IRS has to say visit this link IRS FBAR Financial Account FAQ. Check out also on FBAR Filing Requirements FAQ from their website. Search Google for your local state’s laws. Forbes has a useful business articles in the investment section on filing the FBAR for the first time.