Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 as part of the HIRE Act, is designed to combat tax evasion by U.S. persons holding financial assets outside the United States. FATCA requires certain U.S. taxpayers with foreign financial accounts to report those assets to the IRS along with their annual income tax returns.
Who Must Report Under FATCA?
U.S. taxpayers holding specified foreign financial assets with an aggregate value exceeding $50,000 are required to report those assets using Form 8938, which is filed along with their annual tax return. This reporting requirement applies to tax years beginning after March 18, 2010, meaning most taxpayers were first impacted during the 2011 tax return season (filed in 2012).
Penalties for Non-Compliance
Failure to report foreign financial assets on Form 8938 can result in a $10,000 penalty, with additional penalties up to $50,000 for continued non-compliance after IRS notification. Any underpayment of tax related to undisclosed foreign assets may trigger a 40% substantial understatement penalty.
Foreign Financial Institutions (FFIs) are also required to report certain information directly to the IRS about accounts held by U.S. taxpayers or foreign entities in which U.S. persons have significant ownership interests. See participating countries in FATCA here. Countries signed up for FATCA.
We can help you with the following:
✅ Tax Return Preparation Services and
✅ Cryptocurrency Tax Preparation Including “Pig Butchering” Tax CPA
✅ Real Estate Tax Preparation CPA
✅ Back Taxes (Non-Filed Taxes) Services
✅ Foreign Gift, Inheritance and Retirement Tax Services, Form 3520
✅ Ponzi Scheme Safe Harbor Tax Preparation Help
✅ Foreign Tax, FBAR, and Account (FATCA) Form 8938
✅ Office of Foreign Assets Control (OFAC) License and Tax Services
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Costa Mesa, CA 92626
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