U.S. law requires that all taxpayers pay taxes on any foreign income or assets they have. This extends to anyone who is required to file taxes in the United States; it is not limited to U.S. citizens. Many people are not aware of this and subsequently fail to file and pay taxes on their foreign income or assets. Any taxpayer that fails to file legally required tax returns can face severe penalties including, among others, “failure to file” which can require the taxpayer to pay a 25% tax penalty or “failure to report foreign bank and financial accounts” which result in a civil fine of anywhere from $10,000 to $100,000. Foreign assets that must be filed and reported include, but are not limited to:
- Financial accounts held at foreign financial institutions
- Financial accounts held at a foreign branch of U.S. financial institution
- Foreign stock or securities not held in a financial account
- Foreign mutual funds
- Foreign hedge funds and foreign private equity funds.
Recent Comments