BEWARE: Americans with Foreign Bank accounts and assets: What are the chances of IRS catching you?

I’ve spoken to many attorneys, individuals, and business owners and the recurring theme seems to be with foreign account holders is that they won’t get caught because they feel to have “small” amounts of money overseas or they feel there isn’t a way for IRS to get a hold of their bank account information.

This is an early warning to come clean as soon as possible as U.S. is working diligently with foreign countries to help them have US Taxpayers be compliant with the Internal Revenue Code. Over 100 Countries are either have signed, in force, or agreement is in substance with the Unites States to assist the IRS in targeting US persons (Citizens, Green Card Holders, and other US person that files a 1040) to come clean with their Foreign income and bank accounts.

You can find a list here of all the countries working with US in non-compliance of foreign income and assets held by US Persons:

As mentioned on the link above “FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.”

There are many agencies working to exchange information to get US taxpayers to be compliant.

Already there have been hundreds of thousands of bank accounts being reported to the IRS. One of the most notable one released in the news is the Intergovernmental agreement between US and Canada, the IRS has received roughly 155,000 US Citizens bank records on September 2015 held in Canada. There is another wave of  Canadian bank accounts to be reported in September 2016 which are held by US persons.

The good news is that there are favorable programs available at the moment for taxpayers to voluntary come clean and report their bank accounts and other assets:

  • Delinquent International Information Return Submission Procedures – No Penalty for qualified persons with proper submissions.
  • Delinquent FBAR Submission Procedures – No Penalty for qualified persons with proper submissions.
  • Streamlined Foreign Offshore Procedures – No Penalty with qualified persons with proper submissions.
  • Streamlined Domestic Offshore Procedures – 5 percent of the highest aggregate balance/value of the taxpayer’s foreign financial assets for qualified persons with proper submissions.
  • Offshore Voluntary Disclosure Program – 25% Plus Accuracy related penalty of 25% for each applicable year.

We at Modi CPA, highly recommend that US taxpayers with foreign accounts to utilize one of these programs as these programs can be terminated at any time and once the IRS sends out inquiries regarding your foreign bank accounts then they can assess heavy penalties or even criminal prosecution.

We assist numerous clients by assisting them to enter into OVDP – Offshore Voluntary Disclosure Program, Streamlined Domestic Offshore Procedure, Delinquent FBAR Submission Procedures, and Delinquent International information Return Submission Procedures.

Modi CPA is a licensed firm in the state of Texas in The Colony, TX and service clients throughout the United States, Canada, India, Russia, UK, and DFW Metroplex area (Dallas, Addison, Lewisville, Plano, Garland, Forth Worth, Arlington, Richardson, McKinney).We are a qualified firm to discuss Domestic and International tax services to ensure your compliance with the United States’ International tax laws. Do not hesitate to contact our office should you have further questions. Our Phone number is (214)618-0468 and email is