The Foreign Account Tax Compliance Act (FATCA) requires that foreign financial institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments.
U.S. persons are required to report, depending on the value, their foreign financial accounts and foreign assets under the Hiring Incentives to Restore Employment Act.
do i need to file the statements of specified foreign financial assets
FATCA requires certain U.S. taxpayers holding foreign financial assets with an aggregate value exceeding the reporting threshold to report information about those assets on Statements of Specified Foreign Financial Assets, which must be attached to the taxpayer’s annual income tax return.
You MUST file the Statements of Specified Foreign Financial Assets if:
You are a specified person (either a specified individual or a specified domestic entity), and
You have an interest in specified foreign financial assets required to be reported, and
The aggregate value of your specified foreign financial assets is more than the reporting thresholds that applies to you.
Non-Compliance with Reporting Requirements
There are serious penalties is you must file the Statements of Specified Foreign Financial Assets and do not do so. A $10,000 failure to file penalty, an additional penalty of up to $50,000 for continued failure to file after IRS notification, and a 40 percent penalty on an understatement of tax attributable to non-disclosed assets.
US & Canada Tax - Lily Lo CPA Professional Corporation - Edmonton, Alberta