Have Foreign Bank Accounts or Other Assets? The IRS Wants to Know!

February 6, 2012

The IRS recently released a new tax form (Form 8938) that may need to be filed with your tax return this year if you have an ownership in certain “foreign financial assets.”  Foreign financial assets include: foreign bank accounts; foreign broker accounts; investments in foreign bonds or securities; ownership interests in a foreign trust; certain foreign pension payments; and investments in any foreign entity which may hold such assets as real estate, a trade business, etc.

The reporting rules and filing thresholds are complex, but if the value of your foreign financial assets was in excess of $50,000 (or $100,000 if married filing jointly) at the end of 2011 or exceeded $75,000 ($150,000 if married filing jointly) at any time during 2011, and you are a United States citizen or resident alien, you are required to file the new form.  These dollar thresholds are four times higher for taxpayers who lived abroad during 2011.

The penalty for failure to provide the required information with your tax returns is $10,000

For more information, please contact our international tax advisor at 301.231.6200.