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In the past several years, the IRS has been vigorously pursuing taxpayers who fail to comply with foreign reporting requirements, imposing severe penalties for noncompliance. Therefore, as we begin a new year in 2015, it is important taxpayers are reminded of the forms they are required to file, and informed of foreign reporting requirements they may be unaware of. Below are some of the most common forms required to be completed to disclose foreign holdings:

 

  • FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), for US taxpayers with greater than $10,000 in a foreign financial account
  • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company (PFIC)
  • Form 926, Return by a US Transferor of Property to a Foreign Corporation, required when the cash transferred by a person to a foreign corporation exceeds $100,000 during any 12-month period
  • Form 8865, Return of US Persons With Respect to Certain Foreign Partnerships, to report constructive ownership, transfers and changes in interest involving foreign partnerships
  • Form 5471, Information Return of US Persons With Respect to Certain Foreign Corporations, for US persons who are officers, directors or shareholders in certain foreign corporations
  • Form 8938, Statement of Specified Foreign Financial Asset, for US taxpayers with more than $50,000 of foreign financial assets on the last day of the tax year or more than $75,000 at any time during the tax year. This requirement is in addition to the FBAR reporting.
To ensure you're meeting your foreign reporting requirements, please contact your professional