US taxpayers face horrendous fines for failing to accurately report foreign financial assets on the annual 1040 tax return using form 8938. The fines range from 50%-125% of the asset value every year not accurately reported. This is very serious stuff.
One individual pointed out that the IRS has a document called “Question & Answers on Form 8938” which says that ownership of “foreign real estate is not is not a specified foreign financial asset required to be reported on form 8938.” While this is narrowly true, it is dangerously misleading. Here’s why.