Today, I’m going to deal with reporting your offshore bank account to the IRS. You all know that I do think that offshore is about the only real safe place that you can put your money if you’re under a creditor attack.
There are many videos as to the multitude of reasons why I believe that but to do that you all are going to need an offshore bank account and as most of you know, offshore bank accounts are different than going to Wells Fargo or Chase or Bank of America.
More info on filing FBAR form, how to file fbar form and other details – http://www.irs.gov/businesses/small/article/0,,id=148849,00.html
Those banks offshore really take care of you. They allow you to trade securities, they have a lot more confidentiality and literally a good 15 of them are stronger than any of the banks in the United States. Although there are videos on choosing bank accounts, don’t forget my rule, always stay with Fortune 500 level banks, nothing, nothing less than Bank of America, Wells Fargo, and Chase abroad. Believe me, there are plenty of stronger banks than those- don’t deal with the boutiques, deal with the big ones. But that’s for a different video.
Today, I’m going to show you how to stay out of trouble with Uncle Sam and it’s really very simple. First, I want you to take the problem or the issues of doing business internationally very seriously. The U.S. government is being cheated out of over $100 billion a year by people failing to disclose or fraudulently reporting income from offshore bank accounts. It’s a big deal. It’s serious.
The IRS is going to get to the people that aren’t reporting offshore bank accounts, and if you think you’ve slipped through a crack, think again, you have it. The IRS knows every single bank account abroad, at least every single bank account abroad that has any relationship with a U.S. bank; and you can’t transfer money without a correspondent relationship, so the Patriot Act has given the U.S. government access to any and all offshore bank accounts. In addition, they’re spending a large amount of money and energy interviewing banks, buying information, looking for cheaters, and that the deal is very serious. The penalties are extremely large.
Filing the FBAR form
Now first, take it seriously. Don’t mess with the government. Don’t mess with the government! I’m going to show you the FBAR, the FBAR form. It’s called the TDF 90-22.1. I don’t why it’s such a dumb name but that’s what it is. It’s a little form. It’s due on June 30th. It has nothing to do with your tax return.
All it does, it says I have an offshore bank account I either signed on or I control, and it had basically $10,000 in it. Any significant activity, any significant control, even if you’re not a signatory requires that this form is signed. Don’t mess with it. Don’t walk a tight rope. I’m not even going to go over how to walk a tight rope because it isn’t worth it. If there’s any doubt, file a form. The form doesn’t increase taxes. The form doesn’t expose you to more audits. A form is a nothing form and it just simply keeps you out of trouble. It doesn’t create any problems. I want you to look at it.
See part one, they want your name, no brainer. They want information on the organization because it can be an organization and not just an individual. It’s really short. Look at it. I’m going to be giving you this form. You don’t have to read it from this video, really no brainer. There are some simple instructions. Each bank account has a separate box you fill in, you give them the bank account number, you talk about the maximum value of the account during the calendar year.
See, this is number 15, each account, you have to do this. It does not, I want to repeat, it does not increase your audit risk; but I tell you what, having your money abroad certainly increases your safety and keeps your creditors from being able to get to it. The same thing with part three, it’s a separate block for each jointly-owned account. It’s a no brainer. You’d see it’s done.
The whole form, I’m just flipping through it. Here are the instructions. Look, it takes less than an hour to do this form for the typical client. Don’t mess with it. Don’t be sloppy with it because remember, there is a $5,000 penalty. In some cases, if you are willful about your failure to file, you can go to jail for five years and pay a $250,000 fine. It simply isn’t worth it.
Now, don’t forget your other tax forms that are required if you have a foreign trust. Again, these are informational returns. They take a very small amount of time to do. That would be primarily the Form 3520. I will be giving – doing a video on the 3520 form and giving you a copy of it, too. Again, I recommend that you don’t try to do this yourself. This isn’t do- it -yourself work. But don’t be afraid of it. Don’t be put off by it. The price of having safety is disclosing information to the IRS.
more info apcorp- Offshore Bank Accounts Explained
View Instructions from IRS on how to file FBAR form and other details – www.irs.gov/businesses/small/article/0,,id=148849,00.html