For several years, Boston residents who failed to report their foreign financial assets to the Internal Revenue Service (IRS) were able to mitigate the consequences of their omission through the IRS’s Offshore Voluntary Disclosure Program (OVDP). However, the OVDP ended on September 28, 2018. While taxpayers still have options for voluntarily disclosing their offshore holdings, there are some important limitations. As a result, consulting one of the Boston IRS voluntary disclosure lawyers at Thorn Law Group is critical to avoiding substantial penalties.

In today’s global economy, it is common for U.S. citizens to work abroad. And if these non-residents want to maintain their American citizenship, they will need to deal with their U.S. tax liability. With the complexity of international tax law, workers abroad will need to understand their U.S. tax obligations and deal with any reporting requirements.

IRS REQUIREMENTS AND PENALTIES FOR DISCLOSING OFFSHORE BANK ACCOUNTS

What is an Offshore Account and How Do I Disclosure Mine?

Reporting an “offshore” bank account is imperative if a U.S. taxpayer has international assets.

In 2010, the Foreign Account Tax Compliance Act (FATCA) was passed by Congress and signed into law. The purpose of FATCA was to crack down on the use of offshore accounts to evade taxes. While FATCA has likely accomplished this goal, it has also made life much more difficult for American expatriates.

For U.S. taxpayers receiving foreign income, it is essential to be aware of the American tax requirements for such income. The United States is the only major country that taxes its citizens and permanent residents on income earned anywhere in the world. When faced with such an aggressive government stance on foreign income, U.S. taxpayers receiving foreign income must be certain they are in legal compliance.