International Tax

Cross-border tax carries outsized penalties for paperwork failures. The account itself is usually legal and the income often modest, but the forms that were never filed can cost more than the tax ever would. This page is for U.S. taxpayers with foreign accounts, foreign income, or a foreign life.

Almost every offshore problem has a disclosure path. Which one is open to you depends on a single question: whether the failure to report was willful. We answer that question candidly before anything is filed, because the answer decides the program, the penalty, and the risk.

What has to be reported

If your foreign financial accounts exceed $10,000 in aggregate at any point in the year, you must file an FBAR. Larger holdings can also require Form 8938. The thresholds catch ordinary people, not just the wealthy, and the penalties for missing them are steep.

FATCA works from the other direction: it requires foreign institutions to report their U.S. account holders. The practical consequence is that the IRS often already knows about the accounts a taxpayer assumes are invisible, which makes compliance the safer path rather than the cautious one.

Coming into compliance

• Streamlined filing procedures, for taxpayers whose failure to report was non-willful, using amended returns, FBARs, and a certification.
• The IRS Voluntary Disclosure Practice, where the conduct was willful and criminal exposure has to be taken off the table.
• Reasonable-cause relief, where the filings were missed for a reason the IRS accepts.

Eligibility for the streamlined procedures hinges on non-willfulness, so we assess that first and in detail. Where it does not hold, voluntary disclosure is the route, and offshore accounts covers what the IRS expects to see.

Living or earning abroad

The United States taxes citizens on worldwide income regardless of where they live. Exclusions and foreign tax credits often reduce or eliminate the actual bill, but the returns and information forms still have to be filed, and missed years can usually be fixed. Cross-border tax covers how the pieces fit together.

Our work on these matters is mostly triage followed by paperwork done properly. We establish what was reported and what was not, evaluate exposure candidly rather than optimistically, choose the disclosure program that fits the facts, and prepare the filings so that the penalty result matches the conduct instead of exceeding it.