McFarlane Law

Your Tax Law Firm

Foreign Asset Reporting & Compliance

Offshore Voluntary Disclosure Initiative — Reporting Your Foreign Assets and Accounts

The United States is the only country in world that taxes its citizens on worldwide income. While you can obtain foreign tax credit for taxes paid in another country, you still need to disclose on an annual basis your foreign accounts, foreign assets and earnings. Failure to do so is a violation of U.S. tax law that could be regarded as criminal in nature. The penalties for failing to properly report are extreme, excessive, exaggerated, exorbitant, unreasonable, and probably unconstitutional.

At McFARLANE LAW – A Tax Law Firm - a Scottsdale - Phoenix, Arizona tax resolution law firm, we have years of experience helping individuals with foreign asset disclosure problems. We assist taxpayers in their decision to enter the Offshore Voluntary Disclosure Program (OVDP) and other relief programs. We assist clients in preparing the necessary amended returns and foreign reports (i.e., Foreign Bank Account Reports (FBARs) and Offshore Forms 8839, 5471, 3520, 3520-A). We offer a free initial consultation to discuss your case.

Voluntary Disclosure of Foreign Assets

Most people think of foreign assets as money held in secret Swiss bank accounts. However, disclosure requirements can apply to any assets in excess of $10,000 in any foreign country, from rental property in Mexico or Italy to a bank account in your home country if you hold joint citizenship. The consequences of not disclosing assets and accounts can be very high. For example, the Internal Revenue Service has the power to assess a 50 percent penalty on the balances of undisclosed bank accounts.

Since 2009, the IRS has offered voluntary disclosure programs with reduced penalty. We can help you prepare the substantial package of information that is required to participate in the voluntary disclosure program - OVDI.

Quiet Disclosure of Foreign Assets

Since voluntary disclosure involves the payment of a substantial penalty, some account owners have inquired about quiet disclosure. Quiet disclosure consists of filling out all of the forms you are required to complete for foreign assets and sending them to the IRS service center without notifying the IRS that you failed to disclose the account previously. You do not absolve yourself from possible (and probable) audit and you still risk possible criminal charges and the 50 percent tax penalty for a quiet disclosure. You need to call us before you act as there are civil and criminal consequences to your actions.

Contact Our Arizona Foreign Bank Account Attorney

To arrange a free and confidential consultation about offshore bank account and asset reporting, call 480-991-0032.

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