Foreign Accounts Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (FATCA) represents a key development in the United States’ efforts to combat tax evasion by U.S. persons holding investments in offshore accounts. Enacted in 2010 as part of the Hiring Incentives to Restore Employment Act (HIRE), FATCA mandates that certain U.S. taxpayers holding financial assets outside of the United States report those assets to the IRS.
Specifically, FATCA requires taxpayers holding foreign financial assets with an aggregate value exceeding $50,000 to disclose those assets on Form 8938, Statement of Specified Foreign Financial Assets. This form must be attached to the taxpayer’s annual federal income tax return. Taxpayers who fail to report these specified foreign financial assets will face a $10,000 penalty and any underpayments associated with the non-disclosed assets will be subject to a 40 percent penalty.
FATCA also requires foreign financial institutions (FFI) to report information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest, directly to the IRS. In order to comply with FATCA, FFIs must enter into special agreements with the IRS that set forth specific obligations and procedures for the FFI.
These regulations are complex and confusing. It is often unclear whether an asset is one which needs to be reported under FATCA. Likewise, FATCA regulations leave many unanswered questions about whether a foreign person or business qualifies as an FFI. If you need to comply with FATCA, it is best to contact a Washington, DC tax attorney to ensure you are following all of FATCA’s regulations and rules.
Designing Strategies to Meet FATCA Requirements
The international tax attorneys at Thorn Law Group have the knowledge necessary to help navigate clients through the complex reporting requirements imposed by FATCA. As former IRS attorneys, our skilled legal team has a keen understanding of the tax laws and regulations designed to control and monitor offshore bank accounts and other foreign property and assets.
We are very familiar with the methods and procedures the government uses to investigate these types of accounts. Our attorneys work side by side with clients to identify legal issues and develop strategies designed to bring their offshore accounts into compliance with U.S. laws and regulations.
For a detailed review of FATCA, see our long article about this subject.
A Washington, DC Tax Attorney Can Help You Understand FATCA
Our attorneys are uniquely positioned to help individual taxpayers and organizations comply with FATCA’s highly complex reporting requirements. Each DC tax attorney at our firm has extensive experience in international tax planning and compliance and a sophisticated understanding of the tax laws and regulations governing offshore bank accounts. Our attorneys draw on this background and knowledge to counsel individuals, businesses, trusts and other entities about the processes involved in managing their assets.
Thorn Law Group excels in developing effective compliance strategies for individuals, trusts, family offices and companies across the nation who have financial assets outside of the United States. Similarly, Thorn Law Group works with foreign entities to determine whether they are subject to FATCA and to understand and establish a program for FATCA compliance. We are committed to working directly with our clients to resolve offshore bank account controversies, investigations and enforcement actions as quickly as possible, while minimizing tax obligations and penalties.
To learn more about how Kevin Thorn - a highly sought after tax attorney at Thorn Law Group - can work with you to create a FATCA compliance plan or assist in resolving a tax matter involving an offshore bank account, contact our law offices today at 202-349-4033.