FATCA attorney
In 2010, the United States government took decisive action against offshore tax evasion by enacting the Foreign Account Tax Compliance Act (FATCA). This comprehensive legislation requires both United States persons and foreign financial institutions to report assets held outside U.S. borders to the Internal Revenue Service (IRS).
Who Needs to Comply With FATCA?
FATCA mandates that foreign financial institutions report to the IRS regarding account holdings of United States taxpayers or foreign entities with substantial U.S. ownership. These reporting institutions include:
- Offshore bank accounts
- Investment entities
- Brokers
- Mutual funds
- Hedge funds
- Certain insurance companies
Who Must Comply With FATCA?
You may need guidance from a FATCA lawyer if you’re a United States citizen or resident alien with foreign financial accounts that exceed specific thresholds:
- For individuals living in the United States: $50,000 in foreign accounts at year-end or $75,000 at any point during the year
- For individuals living abroad: $200,000 in offshore accounts at year-end or $300,000 at any point during the year
Regardless of your marital status, if you have financial accounts outside the U.S., receive foreign gifts, or maintain foreign account holdings, the United States Department of Treasury and Financial Crimes Enforcement Network may require you to submit specific tax forms.
Ledingham Law provides experienced FATCA tax attorneys who can identify which IRS forms you need to file, helping you avoid district court proceedings and costly tax issues related to your foreign bank and financial accounts.
How Do I Report My Foreign Financial Accounts?
A knowledgeable FATCA attorney can help you identify which foreign assets must be reported, including:
- Foreign bank, savings, deposits, checking, and brokerage accounts held with a foreign financial institution
- Stock or securities issued by non-U.S. persons
- Interests in foreign entities
- Financial instruments held for investment with non-U.S. issuers
This includes:
- Stock or securities from foreign corporations
- Partnership interests in foreign partnerships
- Interests in foreign estates
- Bonds, debentures, or notes from foreign persons
- Interest rate or currency swaps
- Interests in foreign insurance contracts or annuities with cash surrender value
Reporting Your Foreign Financial Accounts
To ensure compliance, business owners and investors with foreign financial assets should work with a FATCA tax attorney to:
- File an annual report of foreign financial accounts and assets on Form 8938 with your federal tax return
- Gather and maintain all relevant documentation, including account statements and transaction records that the IRS might request during an audit
- Disclose signature authority over offshore accounts owned by entities on Form 5471 or Form 8865
- Conduct due diligence on foreign financial institutions to ensure they comply with FATCA
Many taxpayers choose to grant FATCA power of attorney to qualified legal counsel to ensure their compliance matters are handled professionally and accurately.
The Consequences of Non-Compliance With FATCA
Failing to report foreign financial assets to the IRS carries serious penalties:
- Initial penalty of $10,000
- Additional penalties up to $50,000 for continued non-compliance after IRS notification
- Penalties up to 40% on underpayments of tax attributable to non-disclosed foreign assets
- Potential tax collections and criminal penalties
How a FATCA Attorney Can Help?
A specialized FATCA lawyer brings invaluable expertise to your international tax compliance:
- Identifying all reportable foreign assets
- Determining applicable reporting thresholds
- Preparing and filing accurate forms
- Representing you before the IRS if issues arise
- Providing FATCA power of attorney services to handle complex compliance matters
Don’t navigate these complex international tax requirements alone. Consulting with a FATCA tax attorney early can prevent costly mistakes and provide peace of mind that your international financial activities remain fully compliant with U.S. law.
CLIENT TESTIMONIALS
Being selected for an audit is arguably one of the worst things that could happen to a small business owner, or at least that’s how I felt.
It felt a lot less stressful when I hired Jess to communicate with the IRS on my behalf. Her extensive knowledge of tax law was evident when she would educate not just me but also the RA on the proper law.Â
She went the extra mile every day – with driving to me, essentially holding my hand through an interview, and making sure all responses to the RA were effective.Â
If you get audited – I strongly recommend having her by your side.
– Parul G.
As a small business owner, I had an enormous amount of questions. I needed to know how to book keep, claim deductions and credits, navigate selling online, providing services in different jurisdictions, and filing quarterly taxes.Â
A small business requires an enormous attention to detail and Jessica helped me be meticulous in strategizing my tax landscape and know the necessary laws and regulations.
I highly recommend her to anyone with tax questions.
– Nate W.
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GET IN TOUCH
Are you facing tax-related challenges, particularly related to FATCA compliance, that have led to conflicts with the IRS? As an experienced international tax attorney, Ledingham Law can ensure you report your holdings to the proper tax authorities. We will provide you with the expert guidance and legal representation necessary to navigate these complex matters successfully.
Your report of foreign bank and financial accounts to the United States tax authorities of holdings in any foreign country from foreign income, social security, or any other offshore funds will avoid civil penalties and tax issues in the future.
Ledingham Law will navigate the United States and foreign governments’ tax codes to minimize additional penalties and bring foreign bank account reporting into compliance.
Contact Jessica Ledingham, a tax attorney in Baltimore, Maryland, today at (240) 673-6869 for a consultation.
