Less Than 3% of US Citizens Overseas Report Foreign Accounts Each Year Reports Bambridge Accountants New York
NEW YORK, March 16, 2020 (Newswire.com) - FATCA is failing with less than 3% of US citizens overseas reporting foreign accounts each year according to a review by the Enrolled Agents and accountants Bambridge Accountants New York.
Under intrusive tax laws, US citizens are required to report foreign bank accounts and financial accounts to the IRS and the US Treasury each year or face penalties starting at $10,000.
- Less than 3% of US citizens living abroad report their foreign accounts to the US
- Of those that did report to the IRS, only 73% made the separate report to the US Treasury
- Penalties for not reporting start at $10,000 for the IRS and a separate $12,921 for the US Treasury
- The figures support the US Treasury report that the Foreign Account Tax Compliance Act (FATCA) is not working
The firm, which specializes in handling the tax affairs of US expats in London and UK expats in New York and California, has reviewed the reporting figures issued by the US Government Accountability Office.
If $10,000 or more is held outside the US in foreign bank accounts, investments and pensions, a report is required each year. The Foreign Bank Account Reporting (FBAR, also known as FinCEN 114) is made to the US Treasury and filed online by June 15, 2020.
The most recent figures show only 204,009 US citizens living overseas made the report. Of an estimated 9 million US citizens living overseas, that is less than 3% who are reporting each year.
Failing to file the foreign assets report gives a penalty starting at $12,921.
In addition, you are also required to file a report of foreign assets in your US tax return if you are over the threshold – less than 1% of Americans overseas filed the report. The penalty for not filing is $10,000, increasing by $10,000 every 30 days to a maximum of $50,000.
Alistair Bambridge, partner at Bambridge Accountants, explains: “US expats can struggle with taxes, the law is complex, introducing the added level of reporting your foreign assets twice seems to have missed most Americans living overseas.
“Many US expats are unaware they need to report all their financial accounts outside the US back to the US Treasury each year. These accounts are reported using the Foreign Bank Account Reporting (FBAR - FinCEN 114). Although it is intrusive, there is nothing to pay as long as the FBAR forms are filed – if not, the penalties can be severe.”
Contact Alistair Bambridge, [email protected], +1 646 956 5566.
Bambridge Accountants has offices in London and New York, specializing in US expats around the world.
Source: Bambridge Accountants New York
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Tags: expat, expatriation, FATCA, FBAR, FinCEN 114, overseas, renounce, renouncing, tax, taxes
