The Internal Revenue Service (IRS) has signaled its intent to target tax evasion and tax fraud in a number of specific areas in 2021. Among others, this includes sports, gambling, lending practices and trusts. Here, Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, highlights some of the key issues that can lead to problems for taxpayers in Massachusetts if they do not manage their federal income tax reporting and payment obligations appropriately.

If you own offshore assets, you may have an obligation to disclose them to the Internal Revenue Service (IRS) in 2021. You may also be required to disclose them to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Failing to disclose foreign financial assets can lead to substantial penalties, up to and including six-figure fines and federal imprisonment. Here, Boston offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, provides an overview of the foreign asset disclosure requirements.

Under the federal Bank Secrecy Act, U.S. taxpayers who own offshore accounts with an aggregate value of $10,000 or more in any tax year are required to disclose their offshore accounts using FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR). Taxpayers must file FBARs annually with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), and failing to do so can lead to steep penalties.

The requirement for U.S. taxpayers to file FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR), exists under the Bank Secrecy Act (BSA). This statute was enacted in order to aid in the federal government’s fight against money laundering and other financial crimes, and violations of the BSA are taken very seriously. As a result, while it might not seem like a big deal if you failed to file an FBAR, the consequences can be substantial—and in some cases, FBAR violations can lead to criminal prosecution. Here, Boston offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains the penalties for failing to file an FBAR: