Don’t Let The IRS Harsh Your Mellow

If you’re thinking of moving abroad or have already done so, you should know that regardless of your destination, the IRS is –and will forever be – your unwanted traveling companion. And they’re not paying for a share of anything; they’re along strictly for the taking.

The best thing you can do to minimize their annoyance is to make sure you’re doing everything you’re required to still do as a US citizen. The best way to do that is to find a tax advisor you trust and are you’re comfortable with so that they can keep your bases covered while you’re busy taking in all that your new homeland has to offer.

Does it surprise you that the US is the only industrialized country in the world that taxes its overseas citizens, even if they are paying taxes in another country? That’s how Uncle Sam rolls.

The bottom line is that, as a US citizen, you have to comply with US tax filing requirements. No matter how you slice it, you’re on the hook with Uncle Sam.

That’s not to say that there aren’t a few quivers in your bow.

For example:

  • If you pay your income taxes abroad, a Foreign Tax Credit may be in your future. While it’s true that you can end up not owing any US income tax at all, there’s a hefty pile of penalties and interest you can accrue if you fail to file.
  • Even if you’re not earning income in your new homeland, you should file a return with the US. You’re not required to but it’s the smart move because it acts as a blocking measure. There is a statute of limitations on tax disputes, and if there is a dispute over back taxes, your filing starts running out the clock on the statute of limitations.
  • If you file before the IRS gets on your case, you’re getting in front of the problem. If you owe nothing, there will be no penalties or interest. If you do owe taxes, you’ll end up paying less because you’ve filed voluntarily.

We’ve Got Your Back

The US tax code changes every year. Expatriate tax return is significantly more complicated than a normal US tax return, and the IRS recently hired almost 1,000 additional agents to make sure expats are filing correctly. These guys play for keeps.

The decision to move abroad is a life-changing one, and it’s important to have someone who knows all the ins and outs on your side.

Get in touch with us today, and let us start working for you so that you not only can take advantage of all the benefits you’re entitled to but have the protection your entitled to.

Send an email to Eric Stuhler at info@efilefbar.com.

Top-5 Destinations – And Their Taxation Policies – for US Expats

Whatever your reason for wanting to join the ranks among the growing US expatriate population, your destination of choice needs to be the result of comprehensive consideration.

What sort of lifestyle, climate, culture, tax structure, etc. are you looking for? Those are just the basic questions; there’s lots more to consider.

Before we get into the top destinations for US expats, there are a few things you need to understand as far as taxes go. If you’ve already moved abroad, these will serve as good pointers to make sure you’re on track.

Run Out the Clock On Your Tax Responsibilities
The US has tax treaties with a host of countries that encourage the trading of banking on US citizens. You may think that because you’re earning money in another country and paying that country’s taxes, you’re not required to pay US taxes. You couldn’t be more wrong. You’ll be double-taxed.

If you’re not earning income in your new destination, you should still file a return with the US. You’re not required to but it’s the smart move because it acts as a blocking measure. See, there is a statute of limitations on tax disputes, and if there is a dispute over back taxes, your filing starts running out the clock on the statute of limitations.

Pretty slick, ‘eh?

Some US states are easier to work with than others when it comes to proving your non-resident status and avoiding their state tax requirements. The worst of the lot are California, South Carolina, Virginia and New Mexico.

Ok, enough of that; let’s talk about a few possible destinations for you that are at the top of most lists for US expats.

Top Destinations

  1. Singapore

With a thriving local economy and high quality of life, Singapore tops many lists of favorites for expats. Many expats there rave about a combination of financial and career advantages that they just can’t find in the US. As for family life, most expats say they’ve enjoyed a smooth and safe transition.

Personal income tax rates in Singapore are among the lowest in the world. Their progressive tax rate starts at 0% and ends at 20% for earners above $320,000.

  1. New Zealand

A recent survey found that 3 in 5 expats living in New Zealand are more physically active than they were in the US and report significant improvements in their health. New Zealand seemingly has it all: adventure, a strong social scene, incredible natural landscape and a culture centered upon being family friendly.

Income tax and a Goods & Services Tax fund the infrastructure. Key features of New Zealand’s tax system include:

  • No inheritance tax
  • No social security tax
  • No healthcare tax
  • No local or state taxes except for property taxes
  • No capital gains tax
  1. Sweden
    With a society and culture viewed as being excellent for raising a family, Sweden is a popular destination. For factors including childcare quality, overall cost of raising children and work/life balance, Sweden ranks tops.

The taxation rate for Sweden is commonly regarded as among the highest in the world, so beware. Taxation is at three different levels of government: the municipality, county council and central government.

4. Belize

This little English-speaking country is a top choice for just about any US citizen considering becoming an expat. It’s less than two hours from Houston, Texas; lists English as its official language and its laws are based upon those of the UK, which should make them familiar to Americans.

The Belize government isn’t going to tax you excessively. In fact, taxes are quite low, and depending on how you earn your income, you could have a zero tax liability.

5. Costa Rica

There are more than 20,000 US expats living in Costa Rica. Clearly, they know something. The standard of living there is high; the economy caters to the middle class; there’s hillside villages, Caribbean beaches, rain forests, thriving valleys and mountains.

Taxation in Costa Rica is based on where the money comes from. Only revenue earned within Costa Rica is subject to taxes. You will not have to pay taxes on your US social security income, pension, investments, etc. But you will be responsible for paying taxes to the IRS.

Wherever You Decide to Call Home, Put Our Expertise to Work For You

We’d hate to see you go, but we understand you’ve got your reasons. Decisions like this are life-changing ones, and it’s important to have someone who knows all the ins and outs on your side.

Get in touch with us today, and let us start working for you. Send an email to Eric Stuhler at info@efilefbar.com.

Read This Before You Run For the Border: Pros & Cons of Moving Abroad

There’s many reasons why a US citizen would want to live overseas. Sure, some have had it with a political system made up of players who seem uninterested in actually doing what they were elected to do. Others go because they are entrepreneurs, teachers, artists or skilled workers trying to find their opportunity in a high-tech economy.

Regardless of the reason to go, there are quite a few pros and cons for US citizens to consider before taking the plunge to live abroad.

PROS
A dollar that stretches. In may countries, our dollar can go quite a bit further than here in the US. This means people can actually break away from the 60-hour work week, can buy more and spend more time with family and friends.

Earn more for your skills. We’re sorry to be the bearer of bad news, but the US really isn’t the land of opportunity anymore. In fact, the US is not even in the top ten in terms of overall gross pay; we’re 20th! Eight of the world’s highest-paying countries for IT managers are in Western Europe.

Enjoying a simpler life. There’ll be no more Joneses to keep up with. It’s difficult to find another country like the US that is filled with so many people committed to competing with their neighbors. Plus, there’s no more neighborhood covenants to obey.

A cost of living that enables you to actually live. In Central American countries for example, it’s quite easy to live very comfortably on $1,000-$2,000 per month – and that includes housing and healthcare.

Your children will become enamored with a world view. Being exposed to new and different lifestyles will enable your children to become world-citizens and will enrich their lives in just about every way imaginable.

CONS
It’s not as simple as packing your bags and catching the next flight out. If you decide to leave the US, it’s imperative you do things legally. Consult the advice of a lawyer or tax professional to help you navigate the web of requirements.

They do things differently there. Buying property, obtaining an identification card, licensing your vehicle can all be a nightmare to accomplish because of unfamiliarity with local legal processes and requirements.

You’re still going to have to pay your US taxes, so learn what FBAR stands for. Uncle Sam’s arms are pretty long, and as long as you’re a US citizen – no matter where you live – you’re going to have to pay US taxes, even if you earn the money from a company in your new country of residence. Unless you renounce your US citizenship, you’ll be required to annually submit an FBAR (Foreign Bank Account Report).

Why pay one country’s tax rate when you can pay two? Not only will you be on the hook for continuing to pay US taxes, you’ll also have the pleasure of paying to support your new country’s infrastructure.

No man is an island. You may not think it now, but you deep down you know you’re going to miss your established social network here as well as your family and friends. Skype is a cool program and has made the world a smaller place, but video chats cannot replace true human interaction.

Wherever You Decide to Call Home, Put Our Expertise to Work For You

We’d hate to see you go, but we understand you’ve got your reasons. Decisions like this are life-changing ones, and it’s important to have someone who knows all the ins and outs on your side.

Get in touch with us today, and let us start working for you. Send an email to Eric Stuhler at info@efilefbar.com.

 

 

 

 

 

How to Come Clean With Your Offshore Accounts

Here’s the truth: The secrecy of a Swiss bank account has been relegated to urban legend status. Yes, there was a time when virtually anyone could stash money in one of Switzerland’s best banks and rest assured no one else would know about it. Those day are gone.

In fact, the message most Swiss banks would deliver to US citizens today would probably be, “Please take your business elsewhere. Your Internal Revenue Service has beaten us up pretty badly in the courts, and taking your money just isn’t worth it.”

There’s massive pressure being exerted internationally by the IRS for banking systems to clean up their act. While we here at home know that the IRS plays hardball, other countries are finding just now finding out. Credit Suisse, a huge Swiss bank, plead guilty to conspiring to help US tax evaders and agreed to pay a $2.6 billion fine. A much smaller bank, Wegelin & Co., are no longer in business after making a similar plea.

In short, the jig is up.

Navigating Your Way With the IRS

As US citizens, we already know what the other countries in the world are just now finding out: The IRS can be an absolute beast in its quest for making sure everyone pays up. They’re masters manipulating public opinion. They want us to be afraid of them, and they have succeeded – with the help of the US Congress – in making us so.

As you look at our site, it should be obvious that we’re experts in all things related to taxes and specialize in the FBAR (Foreign Bank Account Report).

Why should you care about the FBAR? Simple; if you are a US citizen, your income is taxable regardless of what country it comes from. If you’ve never filed an FBAR, you need to do it ASAP, because the IRS is aware of it.

That’s where we come in. Because the FBAR is not a well known requirement among the US tax paying population, the procedure for filing one can be equally unknown.

Let’s take a look at the different ways we can help you file your FBAR. Please note that these procedures are for US citizens and green card holders.

  1. Streamline Filing

This process is for those who have not paid their taxes on time because of honest mistakes – didn’t know about requirements, were not up to speed on tax laws, etc. – and want to do the right thing. In this process, the penalty for not paying taxes on offshore assets is approximately 5%.

  1. Delinquent Filing

The word “delinquent” makes this sound harsh, but it’s really not that bad. This procedure is for taxpayers who are current with their accounts but did not file the required FBAR form.

To make a delinquent filing, you’ll just need to include a statement for why you were unable to told the form, and certify that none of the accounts you have authority over are engaged in tax evasion.

  1. Offshore Voluntary Disclosure Program (OVDP)

The OVDP is for taxpayers who willfully neglect to report income and file FBARs. This option is a very expensive one, including a 27.5% or 50% offshore penalty based on the highest value held offshore over eight (8) years.

Put Our Expertise to Work For You

Regardless of how to choose to proceed, it pays to have someone who knows all the ins and outs on your side. We are that someone, and we can save you more of your money.

Get in touch with us today, and let us start working for you. Send an email to Eric Stuhler at info@efilefbar.com.

Penalties Primer for Not Filing FBAR

Funnyman John Oliver had this to say about the IRS: “Dealing with the them is obligatory. It often functions badly. And it combines two of the things we hate most in life: someone taking our money and math.”

The IRS is hated by many in our country for many reasons, but chief among them is the power they hold and the punishment they wield without hesitation.

When the subject comes to FBARs (Foreign Bank Accounting Reports), the IRS has an enhanced capacity to mete out some really tough punishment.

To recap, the tax system of the US is worldwide. No matter where in the world you earn your money, its taxable. The FBAR is a tax filing document for US citizens with one or more international bank accounts that has reached an average balance of over $10,000 during the year. The accounts can be held directly or indirectly in the form of:

  • Bank account;
  • Brokerage accounts;
  • Direct ownership of foreign mutual fund;
  • Foreign-issued cash-value life insurance; or
  • A trust.

New Muscle to Flex
Financial disclosure requirements are nothing new. But in late 2015, thanks to the Foreign Account Tax Compliance Act (FATCA), the US has made agreements with more than 100 countries requiring their financial institutions (commercial banks, investment banks, insurance companies, brokerages, etc.) to provide the IRS with info regarding any accounts held by US taxpayers.

Getting the feeling somebody’s watching you? We know what you mean. You can choose to fight disclosure if you want, but the odds are not in your favor.

If you willfully fail to disclose your oversea assets, you could be on the hook for 50% of your total balance or $100,000 – whichever is greater – for every year you failed to file an FBAR.

If you have multiple accounts, the fine could be from 50% to 100% of your highest balance.

You could also be sent to prison for five years. Nobody wants that. The food is sub-par, your clothing is chosen for you and the camaraderie is not what you’d think.

If your failure to file an FBAR is deemed non-willful (not many people even know about the FBAR) then the IRS may go a bit easier but can still impose a penalty of $10,000 for every year you fail to file an FBAR.

Do the Smart Thing: Hire a Tax Expert

The IRS does have a bit of discretion when it comes to dropping the hammer, especially in cases where the failure to file is deemed non-willful. Again, the IRS doesn’t go to great lengths to tell people that the FBAR even exists, so failure to know about it is not unheard of.

Regardless, you’re still going to have to pay your back taxes plus interest. Whether you pay the full amount or are able to position yourself to lessen the pain depends upon you making the wise decision to add a tax expert to your team.

Get in touch with us today, and let us start working for you.

Send an email to Eric Stuhler at info@efilefbar.com.

Renouncing Your US Citizenship: We’d Hate to See You Go…But We Get It

No matter how you slice it, immigration into the US is a hot button topic for a myriad of reasons. But just as there is a long line of people waiting to get into the “land of opportunity,” there is an increasingly growing number of people eager to get beyond what they view as Uncle Sam’s greedy fingers.

Why would anyone in their right mind willingly leave the US? The most common reasons are tax laws.

Let’s face it: few countries can compete with the US when it comes to the notion that the last person entitled to your hard earned money is you. The US government has it down to a science.

People are wising up and checking out. During the first three months of 2015, 1,335 US citizens renounced their citizenship. At first blush, that may not seem like a lot of people. It is, however, the highest number ever recorded for one quarter.

The Process

One of the things the US excels at is policy. As a country, we do love our paperwork. Renouncing your citizenship is a bit more complicated than ripping up your passport.

According to US law, you must complete a lot of paperwork, participate in interviews and fork over a bit of money. You can’t do it by mail, email, phone calls or through a third party while in the US.

Get this: In an odd bit of irony, the US Department of State has seen the increase of citizens wanting to revoke their citizenship and, rather than try to talk them out of it, they’ve identified it as another source of revenue. They’ve recently raised the fee for renunciation from $450 to $2,350. In addition, some high-income citizens may be subject to an “exit tax.”

Consequences
Before you start packing your bags and brushing up on your Spanish, you should carefully consider what you’ll be forfeiting by getting the heck out of Dodge.

You’ll no longer:

  • Be able to vote in US elections;
  • Have access to government protection and assistance while traveling overseas;
  • Be able for your children to have automatic citizenship if they’re born outside the US;
  • Have access to federal jobs;
  • Enjoy unrestricted travel into and out of the US.

Another HUGE reason to think long and hard before renouncing your citizenship is that the decision itself is irrevocable. There’s no second chance when you make the decision to move.

It’s About Fairness

Of the reasons given for renouncing US citizenship, tax laws are at the top of the list. Those choosing to leave aren’t necessarily doing so because of the money itself. Rather, it’s the tax compliance and disclosure laws they consider to be heavy and unfair.

Newer tax laws like the Foreign Account Tax Compliance Act (FATCA) contribute to the notion of double taxation. The US is peculiar in that her citizens are taxed regardless of where they live and where their income is earned. Higher-income earners often end up paying taxes in the US and abroad.

Expatriates-to-be may see leaving the US as an end to being subject to the complicated US tax reporting responsibilities.

We Don’t Blame You

At the end of the day, it’s your life, and you’ve got to do what’s right by you.

If you’ve already decided to renounce your citizenship or are seriously thinking about it, do the smart thing and let us help you. We know all the ins and outs, and can make sure that when your ship sails, you’ll have calm seas.

Get in touch and let us start working for you. Contact Eric Stuhler at info@efilefbar.com.

Make Money by Selling Money

If there’s one thing disliked more than the IRS, it’s clichés. But we’re going to make an exception for this article. Smart investment centers around three words: diversification, diversification and diversification. One of the best ways you can diversify your investments and position yourself for big payoffs is trading foreign currencies.

Simply put, by trading foreign currencies, you make money by selling money. Pretty cool, no?

If you think trading in currencies is for the super wealthy or those with an inside line to the decision makers, it’s time to think again. Just as shopping for practically anything can be done online these days, you can trade in foreign currency with the click of a mouse.

One of the huge perks of trading currency is that you can make money when the economy at home is sliding. Think of it like this: if you’ve got a bad feeling about what the folks in Washington, DC are doing and think they’re going to cause the US economy to tank, bet against the dollar. You’ll actually benefit if the economy does go south. You’re not being unpatriotic: you’re realizing the American dream by being smart and seeing opportunity from the shortsightedness of others.

Before we go any further, we must emphasize that, as with any new investment or financial opportunity, it’s smart to leverage with the knowledge of people who do this type of thing for a living and know all the ins and outs on the legal side. We can help you out there.

Now, to invest in or trade in foreign currencies, your basic survival kit will consist of a:

  • Commitment to ongoing research, because the markets are nearly always in flux;
  • Brokerage or PayPal account;
  • Bank that accepts or deals in foreign currency;
  • Foreign currency certificate of deposit (CD); and
  • Forex (foreign exchange) online account.

Again, this is no big deal; we can help you with all of this.

Benefits and Risks

There are numerous benefits and risks with investments in foreign currency, but we’ll touch on the most weighty ones here.

First the benefits.

There is no closing bell. The foreign currency market runs 24/7 356. This is a good because you can join the market on your time. Many traders take advantage of software to run their trades automatically when they’re busy with other things.

The foreign currency market offers perhaps the most opportunity. With daily activity often exceeding $4 trillion per day, it is the largest and most liquid market in the world.

Variety gives you flexibility. Because there are many different types of currencies, you can turn a loss around by trading in a different currency.

Now for the risks.

There is a small initial investment required. This is called a margin, and it’s used to provide access to the forex market. At times, there are fluctuations in this investment which can require you to pay just a bit more.

The 24-hour market can also cost you just a bit. Because the forex market is 24/7, exchange rates can change before trades have settled. In other words, currencies can be traded at different rates throughout the day.

A currency crisis can occur. In many developing countries, any fluctuation in their political system can have a dramatic effect on their currency.

We’re Experts and We’re Here to Help You

There are many benefits to investing in foreign currencies, and you don’t have to be a big player to take advantage of them. But to make sure you’re able to reap all of the benefits, work with an expert.

Remember, as a US citizen, you’re required to pay taxes on monies earned anywhere throughout the world. Our expertise can help you not only make money, but keep more of the money you make.

Our specialty is the FBAR (Foreign Bank Account Report); it’s a requirement for all US citizens who earn monies in other parts of the world.

Get in touch and let us start working for you. Contact Eric Stuhler at info@efilefbar.com.

Offshore Banking Can Work For You

If you think offshore banking is for the super rich, money launderers, drug smugglers or tax evaders, it’s time to think again.

The reality is that the average person can benefit in a big way by investing offshore, and it’s no more illegal than sending yourself offshore.

Do It With Ease

The person who invented the Internet should be sainted. Because of it, practically everything has been made easier, and offshore banking is a prime example.

In many cases, your offshore account can be set up in a matter of hours if not minutes. Opening an account online is very much like opening a new account at your neighborhood bank.

The basics you’ll need to provide are:

  • Your personal information (name, date of birth, address, occupation and citizenship). These can be satisfied with a photocopy of your passport, driver’s license or even a copy of your most recent utility bill.
  • Reference documents from your current bank that provide an average of your balances. Bank statements from the last 6-12 months can do the trick.
  • Proof of where your funds are originating from. A copy of your paycheck with employer information is often enough.

Choose a Currency For Your Account
Chances are good that, after you establish your offshore account, you won’t be dealing in dollars and cents…and that’s a good thing.

Offshore accounts usually give you the option of which currency to secure your earnings in. This is beneficial if your country’s currency is not stable. You may be able to earn interest on your deposits with certain currencies.

Minimize Your Tax Exposure

It’s ok to admit it; we’re all friends here: No one likes the IRS. If it’s possible to significantly – and legally – reduce your tax bill, why not do it?

There’s a host of countries lined up to offer you tax incentives for opening accounts in their banks. Put yourself in their shoes: if you’re the head honcho of a tiny country with limited resources, attracting investors would be near the top of the list to dramatically increase economic activity.

Keep in mind that as a US citizen, you’re still going to be taxed by the IRS for any money you earn anywhere in the world. That’s while you’ll need to file an FBAR (Foreign Bank Account Report). So while you will not be able to evade your federal income tax responsibilities, the amount exposed to taxation can be seriously reduced.

Ensure Your Business Remains Your Business

It’s fairly easy for the US government or even your neighbors to get a glimpse of your financial activities. Nobody likes that. Some countries have established laws that prevent banks from giving out information about account holders. Unless you’re suspected on an shady things like drug trafficking or money laundering, your business will be no one else’s business.

Do The Smart Thing: Let an Expert Help You

We’ve talked about the benefits of offshore banking. Actually, there’s lots more benefits to it than the ones we’ve discussed here. But to make sure you’re able to reap all of the benefits you’re entitled to, work with an expert.

There’s a reason why we know what the fine print means, and it has nothing to do with our glasses. We know all about things like FBARs, and would love to talk with you about it.

Send us a note so that we can start working on your behalf. Contact Eric Stuhler at info@efilefbar.com.

Haven’t Paid Taxes in Years? We Can Help You Get On With Living

There are a lot of things that make the US a fantastic place to live. Its tax code is not one of them.

No matter where you live in the world, if you are a US citizen, you’re on the hook for paying your proverbial fair share of taxes. If you are a new US citizen living stateside and have a green card, consider that your ticket to share in the fun of giving Uncle Sam a portion of your hard-earned cash. Lucky you.

Unlike most other civilized nations, the US taxes its citizens and green card holders on their income wherever it’s earned. The complicated tax code itself is rife with complex reporting requirements that include severe potential penalties for those who fail to comply.

In 2010, the IRS decided to play hardball with those who didn’t file. With its backing, the US Congress passed Foreign Account Tax Compliance Act (FATCA), which forcefully pushed foreign banks and other financial institutions to provide information on US citizens who were hiding millions in offshore accounts.

The IRS Has a Heart for the Innocents?
While the stated effort of the FATCA is understandable, many US citizens and green card holders who simply didn’t understand or even know about their tax responsibilities became entangled in its web.

For many, the actual reasons for not filing were and are usually quite benign. The most common are:

  • I have an offshore account and didn’t know that it was subjected to US tax laws;
  • Once I got my green card, I had no idea I still had to pay taxes on money I earned in my homeland;
  • My life is just too darn busy; or
  • I can’t afford to pay my taxes.

While we won’t go so far as to say the IRS has a heart, we will give credit where it’s due and acknowledge they are being somewhat human.

In 2012, the IRS established a new streamlining filing system for non-resident US citizens and ones with green cards, with the realization that many had not paid their taxes on time because of honest mistakes but now want to comply with the law.

The financial benefit to streamlining and settling up is fairly sizable as well. Taxpayers residing in the US whose failure to report foreign financial assets and pay all tax due on those assets was not the result of willful conduct are subject to only a 5% miscellaneous offshore penalty.

Contrast that with taxpayers whose conduct in not filing was willful: they pay a much higher 27.5% miscellaneous offshore penalty.

Tax Law is Confusing But We’re Geeks: Work With Us for One Small Fee to Ensure It’s Done Right
For a flat fee of $195, we can clear your tax lien, regardless of how many years worth of taxes you owe.

We know the tax code inside and out and from front to back. We’re geeky that way. We’re experts at helping people who have honestly been overlooking their tax requirements.

For the one-time fee of $195, you can rest easy that we will make sure the IRS knows you’re not one of the bad guys, and that all of the proverbial paperwork –the IRS loves its paperwork – will be completed and filed properly, and you can get on with living.

To get the ball rolling, send an email to Eric Stuhler at info@efilefbar.com.

A Different Kind of F-Word

If there’s four things the US government loves more than anything else, it’s paperwork, procedure, acronyms and taxes. The FBAR involves all four, and not knowing what it is can cost you big time money.

FBAR stands for Foreign Bank Account Report. But c’mon; it really is a bit more fun to just say FBAR.

In a nutshell, FBAR is a tax filing document for US citizens with one or more international back accounts that has reached an average balance of over $10,000 during the year. The accounts can be held directly or indirectly in the form of:

  • Bank account;
  • Brokerage accounts;
  • Direct ownership of foreign mutual fund;
  • Foreign-issued cash-value life insurance; or
  • A trust.

Immigrants Caught in the Web
The FBAR was launched in the 1970s to catch large doses of tax abuse by US citizens sheltering money in overseas bank accounts. Billions of dollars have flowed to the IRS because of the FBAR, and they became a bit more aggressive with its enforcement after the 9/11 attacks ignited attention to terrorist funding.

However, immigrants whose only desire is to become US citizens, have become ensnared by this procedural trap.

While the US government doesn’t place much emphasis on telling people about the FBAR, they are quick to impose some fairly serious punishment for not knowing about it. Failure to complete the FBAR can result in:

  • Up to $250,000 in fines and
  • Five years in prison.

Talk about being blindsided! Nobody should be hit that hard for not completing a form they were not even told about in the first place.

It’s Different Here
The US is a bit different than most other countries when it comes to taxing procedures. Once a person becomes a US citizen, all the money they earn throughout the world is taxed by the IRS. Most other countries do not tax their citizens for money earned beyond their borders, so it’s understandable that new US citizens have not even thought about such a thing.

What is downright wrong, though, is for new citizens to be heavily penalized – in many cases of up to 50 percent of their assets that were earned overseas legitimately before becoming US citizens.

America is not doing herself any favors by being seemingly unable to communicate with her new citizens. Many US-owned companies serve as HIB visa sponsors, and in 2014, the top sponsors were based in technology, accounting and health fields.

Salaries for these so-called “smart” visa holders averaged $105,000. Their population jumped from 499,218 in 2010 to 820,431 in 2012. Does the US really want to reverse the trend on that influx of taxable income by encouraging these new citizens to return to the native land?

Do the Smart Thing and Don’t Be Blindsided

The US tax code is difficult to navigate, and it’s obvious that reform is needed to address issues like the FBAR. With over 1,900 IRS forms and publications, mistakes – and the worries that come with them – are easy to make.

Until remedies are made, it’s smart to enlist the expertise of professionals like EfileFBAR. Their knowledge means you can save thousands of your own money, not to mention the many worries that come with guesswork of doing it yourself.

Send an email to info@efilefbar.com to get the conversation started.