Annual penalties for failing to disclose foreign bank accounts start at $10,000 and increase to 50% of foreign account values. Owners of undeclared foreign corporations and business entities face similar civil penalties. If the IRS believes you owe more than $51,000 in unpaid tax your passport will be revoked and you could be detained at customs on re-entry.
American citizens and green card holders are required to file a tax return each year they receive the equivalent of $12,950 in regular income, or $400 in self-employment income.
Additional reporting requirements must be met if one's foreign account balances exceeded $10,000 at any point during the year, if one owned 10% or more of a corporation based outside of the United States, or if one held more than $25,000 in funds organized outside of the US.
Citizens and Permanent Residents qualify for special deadlines if their tax residence is outside of the United States. (IR-2017-105)
June 15, 2023. US citizens living overseas receive an automatic two month extension to file their taxes.
Foreign account holders who cross the $10,000 FBAR reporting threshold are required to file a separate report with the US Treasury by October 15th, 2023.
What to do?
The IRS will not impose penalties when the absence of liability is properly reported on a late return. Even if you have never filed, we can in most cases eliminate your US tax liability retroactively by claiming unused exclusions and foreign tax credits.
If you haven't already been contacted by the IRS you may still qualify for tax amnesty programs such as the "Streamlined Foreign Offshore Procedure" which waives the accumulated penalties for eligible U.S. taxpayers.
Our workflow is entirely electronic. Regardless of your location, everything can be completed online.
Please send an email or use the contact form below to set up an appointment. Communication will be protected by attorney-client privilege.
Michael de Sarro, EA, CAA
Member: American Chamber of Commerce Working Committee in Taxation, National Association of Enrolled Agents, National Association of Tax Professionals
Registered: US Dept of Treasury, Internal Revenue Service, NY Dept of Taxation and Finance, Financial Industry Regulatory Authority
Alumnus: University of California at Berkeley
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