What Is FATCA?

Congress enacted the Foreign Account Tax Compliance Act in March 2010 to prevent tax evasion through offshore account. After a number of information sharing agreements, Foreign Financial Institutions (FFIs) across the world are sending American account holders data to the US government.

Form 8938

FATCA added another form to your tax return that is somewhat duplicative to the FBAR. U.S. taxpayers must file Form 8938 when the combined value of foreign financial assets exceeds $50,000.

In addition to checking/savings accounts and mutual funds, some other types of foreign financial assets include:

  • Stocks and securities
  • An interest in a foreign entity
  • A financial instrument or contract, for example a Swiss insurance company is under investigation by the U.S. Department of Justice for allegedly helping U.S. clients avoid taxes.

As the volumes of data increase, cross checking information is more important than ever. With the variety of forms for disclosing a foreign partnership, trust or other interest, there are bound to be false positives. These could cause unnecessary audits.

While the effects of FATCA cascade through the tax system, you must quickly respond to any letter that mentions offshore accounts or interests. At Silver Tax Group, our tax defense attorneys are at the forefront and know what it takes to defend your interests.

Contacted By The IRS? Get Help.

What does the letter from the IRS mean? How serious is an alleged offshore account violation? Email us to schedule a free case evaluation with one of our experienced tax attorneys.