If You Live Abroad Do You Still Report Foreign Accounts?

If You Live Abroad Do You Still Report Foreign Accounts?

Reporting Foreign Accounts When You Live Abroad

When US persons have ownership of foreign accounts, they may have one or several international information reporting requirements on forms such as the FBAR and Form 8938.  Unlike most other countries, the United States follows a worldwide income and reporting model for US persons. That means that if you are considered a US citizen, lawful permanent resident, or another resident of the United States for income tax purposes –– you are categorized as a US person and therefore you must report your foreign bank accounts, investment accounts, foreign life insurance policies, foreign pension plans, etc. to the US Government — in addition to your worldwide income. One common question we receive often is whether or not a person must report foreign accounts if they live abroad. Unfortunately, the answer is usually, yes.

Foreign Account Reporting is Not Based on Residence

Some taxpayers get understandably confused by the notion that they reside outside of the United States — they are no longer subject to US tax and reporting. Since this is not the case — even foreign residents who are considered US persons must still adhere to the US tax and reporting requirements. This will typically include having to file one or several international information reporting forms such as:

      • FBAR (Foreign Bank and Financial Account Reporting) aka FinCEN Form 114

      • FATCA (Foreign Account Tax Compliance Act) aka Form 8938

      • PFIC (Passive Foreign Investment Companies) Aka Form 8621

      • Foreign Trust and Gift Reporting on Forms 3520 and 3520-A

Missed Foreign Account Reporting?

If you missed the foreign bank account and financial account reporting requirements in prior years, and Internal Revenue Service has developed several international tax amnesty programs to assist you and see if we get any complaints. We recommend speaking with an experienced offshore tax lawyer who is a Board-Certified Tax Law Specialist to get a solid lay of the land of what the different international tax and reporting strategies are moving forward.

We Specialize in Streamlined & Offshore Voluntary Disclosure for FBAR & FATCA

Golding & Golding specializes exclusively in international tax and specifically IRS offshore disclosure.

Contact our firm today for assistance with getting compliant.