News outlets have been blowing up with news regarding Apple Inc & their sour tax practices. While it may seem as though an Apple a day keeps the profits hidden away; a big crunchy bite is not the cure for foreign tax collectors. France has a sour taste in its mouth (likely, from a granny smith), and has hit Apple with a $6.5 million tax bill.
While there is not enough caffeine this side of the Mississippi to fully discuss taxation and legal tax shelters, it is important to note that individuals who do not report their foreign assets may be subject to some hefty fines.
Any U.S. person that transfers assets to, and holds an interest in a foreign bank account or entity may be required to report under both the IRS code, as well as the Bank Secrecy Act.
If you have a financial account or any foreign assets, there are two major reporting requirements that you need to be aware of (keep in mind, this list is not exhaustive):
#1 Report of Foreign Bank & Financial Accounts – “FBAR” (Form TD F 90-22.1):
- A “U.S. person” that has a financial interest or other authority over foreign financial accounts that have an aggregate value exceeding $10,000, must report an FBAR (unless it falls within one of the exceptions). This includes anything from a bank account to a trust.
#2 Statement of Specified Foreign Financial Assets – Form 8938:
- Taxpayers that have an interest in an account or asset with specified foreign financial assets that exceed $50,000 (on the last day of the tax year) or $75,000 (at any time during the tax year) must report those assets to the IRS.
Florida residents, the filing of #1 does not preclude the filing of #2, & vise-versa. Furthermore, failure to report will result in penalties. Back to our “apple” analogy: if you fail to report, an apple a day does not keep the fines away. It is always better to report, than to face the alternative.
Because of the complex nature of taxes, you should consider seeking a Florida attorney to ensure that you are properly reporting your foreign assets, and avoiding fines.
For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.
It’s a Wild world. Are you protected?SM