The Complex Rules Regarding FATCA
The Foreign Account Tax Compliance Act (FATCA) is legislation that is designed to prevent persons in the U.S. from using foreign bank accounts and other foreign entities to avoid paying U.S. taxes. If a foreign entity does not enter into an agreement with the IRS to identify U.S. investors, they may be subject to significant penalties. At the law firm of Kundra & Associates, our Maryland FATCA lawyers can let international financial institutions and foreign account holders know the impact that FATCA is likely to have.
We can help ensure that foreign institutions are in compliance with FATCA and that U.S. account holders do not face an IRS penalty. Contact our Washington, D.C., tax attorneys online or call 301-637-8130 to schedule a meeting to discuss your situation.
Failure To Comply Will Result In Significant Penalties
U.S. citizens are required by law to report any income earned that they have overseas. They are also required to report any financial interests exceeding $10,000 in the aggregate every year, including foreign qualified retirement accounts, on their annual tax returns. FATCA legislation will give the IRS greater visibility on who has financial accounts overseas and gives the IRS significant authority to penalize institutions that fail to comply with providing this information. A foreign bank that refuses to disclose the name of an account holder and any beneficiaries may face a penalty of 30 percent of any income generated by the account.
U.S. account holders are required to report on any income they may have overseas. Failure to report overseas assets may result in an IRS penalty of up to $10,000 for businesses. This penalty may increase up to $50,000 for continued failure following receipt of an IRS notification.
Protect Your Interests
At Kundra & Associates, our lawyers help protect valuable interests and avoid stiff IRS penalties. We advise on legal obligations in regard to reporting overseas investments. We also work with foreign financial institutions to ensure that they are in compliance with the new laws. Do not wait for the IRS to come knocking on your door. This could detrimentally affect your ultimate resolution. Further, programs such as the current voluntary offshore disclosure initiative will not be available to you until the IRS has your income. Take proactive steps to protect your investments.