Tax week for me so for #reblogWednesday I’m focusing on a couple of tax blogs. Dull yes, but as the ever eloquent Benjamin Franklin stated, “Two things in life are certain, death and taxes.”
I’m a dual citizen and have accounts in Canada. Not big, “we’re hiding our abundant wealth” accounts, but retirement accounts where we would be double taxed and penalised if we moved the assets, and a little savings account where my mom deposits my birthday money. This FBAR reporting is serious … A couple of years ago I spent months working with an IRS agent to get our accounts reported properly and we DID pay a fine. Annoying, yes, but it’s the law.
WASHINGTON — Imagine owing up to $600,000 in penalties on, say, a $20,000 bank account simply because you didn’t report it to the IRS.
It sounds unbelievable.
But such a gobsmacking penalty is possible if your account has been held overseas at a non-U.S. financial institution for years and you knowingly never disclosed it to the U.S. government.
You could be subject to lesser penalties if you voluntarily disclose the account or can prove you weren’t being “willful” by not disclosing it.
But make no mistake: You will likely pay penalties, and — if your foreign account generated income — back taxes and interest as well.
For starters, the United States has a worldwide tax system, meaning every U.S. taxpayer must report all his income regardless of where it was earned.
Second, laws designed to discourage the wealthy from hiding money offshore are also going to snare a lot…
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