Offshore banking – setting up a bank account in a foreign country – can often be a good idea, especially in countries that have favorable banking regulations. Offshore banking can also present risks. In addition, there are IRS reporting requirements that, if not attended to, can cause a taxpayer civil and even criminal liability.

Keeping up with the ever-changing tax reporting laws can be overwhelming. And if you are either a United States taxpayer who has retired overseas or are one who is contemplating retiring outside of the country, you need to know that there are additional IRS obligations to meet. If you fail to understand and meet these additional obligations, you could make errors resulting in substantial penalties.

According to CNBC, many Americans have begun to renounce their United States citizenship in recent months and years. One of the big reasons why so many people are giving up their citizenship and cutting ties with the United States is because of complex new tax rules.  Strict rules for retirement savings and for other types of financial accounts have made it difficult or impossible for many to comply with requirements and have imposed unnecessary costs and complexities.