On February 5, 2013, Canada and the United States announced that they had signed an intergovernmental agreement (“IGA”) implementing the Foreign Account Tax Compliance Act (“FACTA”), showing additional worldwide support for the United States’ initiative to prevent global tax evasion.
Tax Law News and Information Straight from The Tax Lawyer
Offshore bank accounts have long been a path for US citizens to hide income and assets from creditors including the IRS.
Under the IRS Offshore Voluntary Disclosure Program, taxpayers have the opportunity of making a voluntary disclosure of all their offshore financial accounts and assets to the IRS.
Requirements, Purpose and Definitions For Reporting Foreign Bank and Financial Accounts (FBAR)
FBAR requires reporting with respect to financial accounts “in a foreign country,” where “foreign country” defined as “all geographic areas located outside of the United States” (1).
If a taxpayer who is eligible to participate in the Offshore Voluntary Disclosure Program fails to do so, he or she may be open to certain civil penalties if the IRS discovers the taxpayer’s