Seven of the charges that former Trump
advisers Paul Manafort and Richard Gates face are for failing to report
their foreign bank accounts, as required by the Financial Crimes
Enforcement Network of the US Department of the Treasury.
The US government requires both citizens AND Green Card holders to
report all their foreign accounts annually when the combined value of
any accounts outside of the United States exceeds the equivalent of
$10,000 USD. The truth is that while failing to file a US tax return is
not a criminal matter, failure to report foreign bank accounts is a
criminal matter, with potential fines of fifty percent of the high
balance of the unreported account and potential prison time.
Manafort is not the first to be ensnared in this law: Beanies Babies
founder Ty Warner was forced to pay $53 million in penalties in 2013,
and in 2016 Dan Horsky, emeritus professor of business administration
at the University of Rochester was forced to pay a $100 million dollar
fine and serve 15 years in prison after being found guilty of failing to
file his FBARs and properly report tax.
The bad news is that while most US
expatriates do not have anywhere near the level of wealth of Manafort,
Warner, or Horsky, they are required to file their foreign bank accounts
all the same, and failure to do so leaves anyone with more than $10,000
equivalent in foreign bank accounts open to fines of 50% of the high
account balance and potential prison time. (As Manafort had also failed
to report interest in several foreign companies, thus
violating Controlled Foreign Corporation reporting rules, he’s subject
to additional massive penalties.)
The good news is that had Manafort and
Gates been proactive, they would have been able to take advantage of IRS
programs that would have eliminated criminal penalties as well as
potentially eliminated financial penalties, depending upon circumstances
Streamlined filing allows for those who are
not criminally wilful to report their last three years of tax returns
and last 6 years of foreign bank accounts, while paying no penalties on
either tax due or FBAR violations.
American International Tax Advisers has
experts with decades of experience helping US expatriates resolve
serious tax issues, and can assist with both filing tax returns and
FBARs. In many cases, clients owe no income tax and have no FBAR
penalties. In some cases, clients are even owed tax refunds that they
would have lost had they not filed properly.
Contact Chris Mclaughlin, Global Client Manager of American International Tax Advisers at [email protected] for a free call to discuss how we can help you resolve your US tax issues.