For Maryland residents with offshore holdings, keeping up with the federal reporting requirements and the options that are available for maintaining compliance can be a challenge. The Offshore Voluntary Disclosure Program (OVDP) expired in 2018, so U.S. taxpayers who own foreign financial assets must choose a different alternative in 2019. Due to the severe consequences of non-compliance, taxpayers must be extremely careful to avoid mistakes, and we encourage anyone with questions to contact Managing Partner Kevin E. Thorn and the skilled team of Maryland offshore bank account attorneys at Thorn Law Group promptly.
Offshore Account Disclosure Compliance
If you are currently up-to-date on your foreign financial asset disclosures, then not much is changing for 2019. You must still file Form 8938 with the Internal Revenue Service (IRS) if your holdings exceed the reporting thresholds, and you may also need to file a Foreign Bank Account Reporting (FBAR) form with the Financial Crimes Enforcement Network (FinCEN). The current thresholds for foreign financial account reporting are:
- Form 8938 – For single U.S. residents and married residents filing separately, a total value of more than $50,000 on the last day of the tax year or more than $75,000 at any time during the year. For married residents filing jointly, a total value of more than $100,000 on the last day of the tax year or more than $150,000 at any time during the year.
- FBAR – For all U.S. taxpayers, a total aggregate value (combining all foreign financial accounts) of more than $10,000 at any time during the calendar year. As explained by the IRS, “This is a cumulative balance, meaning if you have 2 accounts with a combined account balance greater than $10,000 at any one time, both accounts would have to be reported.”
Offshore Account Disclosure Streamlined Filings
If you have not met your offshore disclosure obligations in prior years, then you must catch up using the procedures that are available from the IRS. Now that the OVDP has expired, the primary option available to U.S. taxpayers in 2019 is to submit what is known as a streamlined filing.
The IRS’ streamlined procedures are only available to U.S. taxpayers who have committed “non-willful” offshore account disclosure violations. This means that the failure to file Form 8938 in prior years must have been due to either negligence, inadvertence, a mistake or a good-faith misunderstanding of the law. Other eligibility criteria for submitting a streamlined filing in order to voluntarily disclose offshore holdings to the IRS include:
- Having a valid tax identification number (either a Social Security Number (SSN) or Individual Tax Identification Number (ITIN);
- Not being subject to an ongoing civil examination or criminal investigation; and,
- Paying any and all outstanding penalties owed to the IRS.
Contact the Maryland Offshore Bank Account Attorneys at Thorn Law Group
Have you failed to report your offshore bank accounts to the IRS or FinCEN prior to 2019? Do you have questions about your 2019 foreign financial account reporting obligations? To speak with one of our Maryland offshore bank account attorneys in confidence, please call 240-235-5096 or request an appointment online today.
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