Per the IRS, US taxpayers could be subject to substantial "potential civil penalties" that include the following;
1. A penalty for failing to file the Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as an “FBAR”).
United States citizens, residents and certain other persons must
annually report their direct or indirect financial interest in, or
signature authority (or other authority that is comparable to signature
authority) over, a financial account that is maintained with a financial
institution located in a foreign country if, for any calendar year, the aggregate value of all foreign accounts exceeded $10,000 at any time during the year.
Generally, the civil penalty for willfully failing to file an FBAR
can be as high as the greater of $100,000 or 50 percent of the total
balance of the foreign account per violation. See 31 U.S.C. §
5321(a)(5). Non-willful violations that the IRS determines were not due
to reasonable cause are subject to a $10,000 penalty per violation.
2. A penalty for failing to file Form 3520, Annual Return to Report
Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.
Taxpayers must also report various transactions involving foreign
trusts, including creation of a foreign trust by a United States person,
transfers of property from a United States person to a foreign trust
and receipt of distributions from foreign trusts under IRC § 6048.This
return also reports the receipt of gifts from foreign entities under
section 6039F.The penalty for failing to file each one of these
information returns, or for filing an incomplete return, is 35 percent
of the gross reportable amount, except for returns reporting gifts,
where the penalty is five percent of the gift per month, up to a maximum
penalty of 25 percent of the gift.
3. A penalty for failing to file Form 3520-A, Information Return of
Foreign Trust With a U.S. Owner. Taxpayers must also report ownership
interests in foreign trusts, by United States persons with various
interests in and powers over those trusts under IRC § 6048(b).The
penalty for failing to file each one of these information returns or for
filing an incomplete return, is five percent of the gross value of
trust assets determined to be owned by the United States person.
To continue reading, click here.
No comments:
Post a Comment