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Foreign Bank Account = IRS Audit ?

Discussion in 'Business & Tax Advice' started by agag2, Apr 9, 2013.

  1. agag2

    agag2 Supreme Member

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    Hey

    If someone discloses having a foreign bank account does the IRS automatically audit them? (I'm talking about full disclosure)

    Thanks
     
  2. bryanon

    bryanon Executive VIP Premium Member

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    It wouldn't be physically possible for IRS to perform an audit on every US citizen holding a foreign bank account - so no, declaring a foreign bank account does most certainly not mean an automated decision to audit you (although you may be considered to be in a risk group and therefore have a higher possibility of getting audited than an average joe).

    With that said, should the IRS discover that you have foreign bank accounts exceeding a total of $10k in balance that you have not declared (which is a criminal offence in the US) then you are extremely likely to get audited, taxed and fined.

    Disclaimer: I'm not an accountant or a tax consultant so please take anything I say with a grain of salt and consult with a specialist before making any decisions that may have severe consequences.
     
  3. agag2

    agag2 Supreme Member

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    So you recomend full disclosure for $5,000 account?

    Also I did not disclose the acc before June (FBAR -- didnt know you need to) but I'm filling this out on my tax return.. Do I have anything to worry about?
     
  4. bryanon

    bryanon Executive VIP Premium Member

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    As far as I know (and once again, I'm not a tax attorney, nor do I know more about the US tax system than I've randomly read), if the balances of your foreign accounts total less than $10,000 you don't need to submit FBAR.

    But once again, I won't give you any recommendation and I strongly suggest you to not take any recommendations from forum members - these matters are far too sensitive and possible consequences far too severe to blindly trust the opinion of some random people. Speak to a tax attorney and they will tell you how to act.