Foreign Assets
Explains IRS reporting requirements for foreign assets and income, and the increased ability of the IRS to identify unreported foreign financial accounts.
Declaring Foreign Assets and Income to the IRS
The U.S. citizens and residents are taxed on their worldwide income from whatever source. Some U.S. taxpayers choose not to report their foreign-source income, while other taxpayers are simply unaware of this reporting requirement. The IRS is working more actively than ever before to discover those taxpayers who failed, for one reason or another, to report their foreign income or foreign financial accounts. The taxpayers who fail to report their foreign income or foreign bank and other financial accounts (such as brokerage account, mutual fund, trust, or any other type of foreign financial account) may face heavy fines and in some circumstances even criminal prosecution.
If you have a financial interest in or signature authority over a foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). In addition, the recent rule requires the taxpayer to file a new IRS Form 8938 with their income tax return (Form 1040) to report specified foreign financial assets (SFFAs). This reporting is required under the Foreign Account Tax Compliance Act (FATCA), which was enacted in 2010.
The IRS prefers that you come forward and voluntarily disclose your foreign assets or foreign bank and financial accounts. For this reason, the IRS came up with an Offshore Voluntary Disclosure Program (OVDI). The first OVDI program ran in 2009, the second one in 2011, and the most recent one was announced in 2012. We assisted many taxpayers get more favorable tax treatment of their foreign income via participation in these OVDI programs.
We invite you to contact us today by phone at (425) 289-0629 or contact our Washington tax debt attorney by e-mail , to discuss your case. Find out how we can help.
About Attorney Lana Kurilova Rich
- Washington tax attorney since 2003: Lana Kurilova Rich has been admitted to the Washington State Bar since 2003 and has focused her practice on tax law since opening Lana Kurilova Rich, PLLC the same year.
- Master of Laws in Taxation (LL.M.): Lana earned her LL.M. in Taxation from the University of Washington School of Law in 2007 in addition to her J.D. from Seattle University School of Law in 2003.
- Former Court of Appeals law clerk: Lana served as Law Clerk to the Honorable Elaine Houghton of the Washington State Court of Appeals, Division II.
- Bilingual: English and Russian: Born and raised in Russia, Lana is fluent in Russian and licensed to practice law in the Russian Federation in addition to Washington State.
- Federal, state, and international scope: Lana represents clients before the IRS, Washington State agencies (DOR, ESD, and L&I), and on cross-border tax matters including FBAR and Form 8938 compliance.
- Direct attorney communication: Clients work directly with Lana Kurilova Rich, not a routing desk. Calls and emails are returned promptly throughout the engagement.
- Pro bono Low Income Taxpayer Clinic: Lana has volunteered with the Low Income Taxpayer Clinic since 2006, helping qualifying taxpayers resolve IRS disputes at no cost.
- Integrated tax preparation and bookkeeping: The firm provides federal and state tax preparation alongside legal representation, reducing handoffs and accelerating resolution.
We invite you to contact our Bellevue, Washington, law office today by phone or by e-mail to discuss your case with our experienced tax lawyer. We are here to help.