Penalties for failing to report overseas accounts are stiff. $13,481 apiece for nonwillful violations, the larger of $134,806 or 50% of the highest balance in the account for willful failures. Be sure you comply with the reporting rules, because increasing taxpayer compliance in this area is a key IRS enforcement priority.

The standard for willfulness includes reckless conduct or willful blindness. A man living in Mich. failed to report Canadian accounts he had for several years. IRS slapped him with a penalty of nearly $1 million. According to a district court, the following factors demonstrate reckless disregard of the reporting requirements. The man did not review Schedule B of his 1040, which ask about foreign accounts. He did not bother to ask his preparer about is obligations to disclose the accounts. He had all correspondence on the accounts sent to his sister in Canada. Additionally, he had lots of money stashed overseas.

Foreign Accounts

by | May 21, 2020 | Tallahassee Tax Service | 0 comments