Foreign Account Tax Compliance Act (FATCA)
As with the FBAR, not filing a FATCA will have serious penalties. Overall, the FATCA expands the IRS’ ability to track down unreported accounts, and punishments for discovery are even more severe. Foreign financial institutions (and even certain non-financial) institutions may be forced to provide the IRS with information about accounts held by Americans. While the targets of these provisions are obviously foreign banks and brokerage firms, foreign hedge funds, private equity funds, and trusts may also be classified as foreign financial accounts under the FATCA. Thus you may be required to file a FATCA.
CPA Services – FATCA Penalties
Penalties for non-compliance are harsh, and failure to report can add up to $50,000 in fines. Additionally, the FATCA may extend the three-year statute of limitations to six-years if you neglect to report over $5,000 of income attributable to one of the above assets. Our accountants at Acosta Tax & Advisory can help you file the appropriate forms – contact us today to schedule your consultation.