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April 19, 2014

Foreign Assets: New IRS Disclosure Requirements

It’s certainly legal to have foreign bank accounts and other investments outside the US. In some cases, it’s expected: as in the case of foreign families moving to the United States or US persons doing business overseas. But beginning in 2012, the Foreign Account Tax Compliance Act (FATCA) requires US taxpayers to disclose certain foreign assets with an aggregate value exceeding $50,000.

For married individuals filing jointly, this threshold increases to $100,000 on the last day of the year or $150,000 at any time during the year. Higher thresholds apply to individuals residing outside the US. See IRS Form 8938 (currently in draft). This is in addition to Form 8621 which requires information from US shareholders of passive foreign investment companies (PFIC). Both these Forms are filed with a taxpayer’s income tax return and are in addition to the Report of Foreign Bank and Financial Accounts (FBAR) filed with Treasury.

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Richard Jacobson's legal practice includes representation of foreign clients seeking pre-residency tax planning assistance; coordination of U.S. tax and immigration planning; foreign investors in U.S. real estate (FIRPTA) and other business ventures; U.S. companies exporting products or services or conducting business internationally; foreign manufacturing activities of U.S. clients; U.S. business executives planning extended tours of duty overseas; IRS Voluntary Disclosure, FATCA, and FBAR reporting; inquiries from foreign attorneys, trust companies, and...

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About the Author

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Mitchell I. Horowitz practices in the area of civil tax controversies with the Internal Revenue Service and Florida Department of Revenue, including U. S. Tax Court, federal district court and state court litigation; transactional and business law representation.  He represents individuals, tax exempt entities and business organizations, handles audit and collection matters, and performs annual tax maintenance audits for businesses and tax exempt entities.  Mr. Horowitz is a member of the Firm's Emerging Markets Team, as well as other industry teams. He represents...

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