Tax Update for U.S. Citizens Living Outside the Country December 20, 2011— Some dual-citizen taxpayers may have only recently learned about their obligation to file U.S. Income Tax Returns and/or Report of Foreign Bank and Financial Accounts (FBAR’s). Due in part to recent events and news coverage on the issue, the IRS has issued a Fact Sheet for U.S. citizens or dual citizens residing outside the U.S. This Fact Sheet serves as a reminder of the importance of these filings and spells out various requirements and penalties, which are summarized below. As a United States citizen, a yearly federal income tax return must be filed. This return must include worldwide income, including all income, regardless of which country is the primary source. Citizens may also be required to file a FBAR, which must be filed by U.S. persons having a financial interest or signature authority or other authority over any foreign financial accounts if the aggregate value of these accounts exceeds $10,000 USD at any time during the calendar year. The yearly filing date for a FBAR is June 30th. If U.S. citizens did not know of the requirement to file an FBAR for earlier tax years, the Fact Sheet suggests filing the delinquent FBAR’s and attach a statement of explanation. FBAR’s that were due more than six (6) years ago do not need to be filed, as the statute of limitations for assessing FBAR penalties will have expired. It should be noted that no penalties will be asserted if the IRS determines that the filing were late due to reasonable cause. Standard penalty fees include: Non-willful violations: if the IRS determines that this violation is not due to reasonable cause – a penalty of $10,000 USD per violation may be assessed. |
About AIReS AIReS, which was named to the 2011 Inc. 5000 list of fastest-growing independently owned businesses in the U.S., is in its 30th year of providing best-in-class relocation management services. With seven ISO registered U.S. offices and other strategically located employees located around the globe, AIReS is a recognized industry leader in delivering high quality relocation and assignment management services to leading corporations. The company boasts some of the industry’s highest annual customer-satisfaction scores and a client-retention rate of over 98%. For more information, please visit the AIReS website at www.aires.com. |
