Foreign bank accounts aren’t necessarily for mustache-twirling villains and the superwealthy, but they do trip up plenty of people when it’s time to file their taxes. With foreign accounts becoming more common among everyday people and the minimum amount required to file being so low, it can be easy to not even realize you need to file an FBAR. Not complying with FATCA can result in hefty fines. But what are FATCA and FBARs, and what happens if you don’t properly report?
What are FATCA and FBARs? How foreign accounts are taxed in the U.S.
On this week’s episode of the Taxgirl podcast, we’re joined by Matthew Lee. Matthew is a former U.S. Department of Justice trial attorney who is now a partner at Fox Rothschild with a focus on federal tax controversy and foreign account tax. He’s helped hundreds of people handle their non-compliance tax issues, including the FATCA and FBAR. We discuss what is FATCA and what is the FBAR, as well as who should be filing, and the penalties for not doing so.
Listen to Kelly and Matt talk about FATCA reporting:
- What is FATCA? Foreign Account Tax Compliance Act
- What is the FBAR? Foreign Bank Account Report
- The perception of having an offshore bank account
- What type of person gets in trouble with FATCA?
- When you need to file the FBAR
- When do people realize they need help with FATCA?
- The IRS cracking down on offshore bank accounts
- The difference between willful and non-willful non-compliance
- How hard is it to argue non-willful non-compliance with the IRS?
- The line where non-compliance will be criminally prosecuted
- Different forms for disclosures, including Form 8938, Form 5471, and Form 3520
- Penalties for non-compliance
- Fighting the IRS on FATCA
- What is the OVDP and how did it help?
- Are crypto assets supposed to be reported via FBAR?
- How and where to get the right advice on handling non-compliance tax issues?
More about Kelly:
Kelly Phillips Erb created and hosts the Taxgirl podcast, your home for tax news, tax info, and tax policy. In each episode, she shares conversations about taxes, money, and the choices we make. Kelly is a tax attorney who works with taxpayers and tax practitioners like you every day. She helps folks out of tax jams, and hopefully, keeps others from getting into them.
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Kelly’s Website: Taxgirl
Fox Rothschild: Matt Lee’s biography
Matt Lee: Email