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IRS Reminds US Taxpayers To Report Foreign Accounts

by Mike Godfrey, Tax-News.com, Washington

22 June 2016

The Internal Revenue Service (IRS) has reminded American taxpayers who have one or more bank or financial accounts located outside the United States, or signature authority over such accounts, that they may need to file a Report of Foreign Bank and Financial Accounts (FBAR) by June 30, 2016.

"Robust growth in FBAR filings in recent years shows we are getting the word out regarding the importance of offshore tax compliance," said IRS Commissioner John Koskinen. "Taxpayers here and abroad should take their foreign account reporting obligations very seriously."

In general, the filing requirement applies to anyone who had an interest in, or signature, or other authority over foreign financial accounts whose aggregate value exceeded USD10,000 at any time during 2015. Because of this threshold, the IRS is encouraging taxpayers with foreign assets, even those that are relatively small, to check if this filing requirement applies to them.

In 2015, the Financial Crimes Enforcement Network (FinCen) received 1,163,229 FBARs, a record number and up more than eight percent from the previous year. FBAR filings have grown on average by 17 percent per year during the last five years, according to FinCen data.

The IRS is also implementing the Foreign Account Tax Compliance Act (FATCA), which mandates third-party reporting of foreign accounts to foster offshore tax compliance. FATCA created a new filing requirement, the Statement of Specified Foreign Financial Assets, which is filed with individual tax returns. The filing thresholds are much higher for this form than for the FBAR.

TAGS: individuals | expatriates | compliance | Foreign Account Tax Compliance Act (FATCA) | tax | investment | tax compliance | interest | FATCA | law | Internal Revenue Service (IRS) | offshore | United States | regulation | Compliance | Tax

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