IRS focusing on foreign bank accounts

The penalties for not reporting foreign bank accounts can be severe; while a single civil penalty may not exceed $10,000, cumulative penalties can even exceed the value of the foreign bank account.  United States taxpayers who have an interest in or signing authority on a foreign bank account, brokerage account, mutual fund, or other financial account may have a reporting requirement to the Internal Revenue Service under the Bank Secrecy Act.  If the total value of these accounts is $10,000 or more, each taxpayer is required to file a Report of Foreign Bank and Financial Accounts, form TD F 90-22.1.  These forms are to be filed separately from your income tax filing and due by June 30 each year for the preceding calendar year.

Additionally, IRS efforts to obtain foreign bank account information have increased in recent years. Some Swiss banks have agreed to disclose the account information to the Internal Revenue Service.  This action comes after the Swiss Federal Tax Administration received a request from the IRS and pressure from the Justice Department.  Information was requested for the calendar years of 2002 through 2010.  In 1996, a tax treaty was entered into by Switzerland and the United States of America.  Credit Suisse, Clariden Leu, and UBS have all agreed to provide the requested information.  UBS disclosed 4,450 clients in 2009 and paid fines of $780 million.  Other banks under investigation are Julius Baer and Basler Kantinalbank.

Let us show you how to minimize these penalties.  Visit us at www.gyldecauwer.com or Call us at: 909/948-9990