Offshore Bank Account Glossary

Thanks for sharing this!

You’ve probably read the media coverage about the recent agreements between the US government and foreign countries concerning Americans with offshore bank accounts.

If you’re following the unfolding details and are unfamiliar with the lingo, here’s a short glossary.

FBAR. The Foreign Bank Account Report, or Treasury Department Form 90-22.1, Report of Foreign Bank and Financial Accounts. You have an obligation to file an FBAR if you have taxable income from a foreign source, such as an offshore account.

John Doe Summons. A summons issued when the person under investigation is unknown and therefore not specifically identified. The IRS issued this type of summons to request information about taxpayers who were using foreign bank accounts to evade US federal income taxes.

Voluntary Disclosure. A program that allows you to confess to the IRS voluntarily if you have unreported income. The catch: You have to initiate voluntary disclosure before the IRS establishes contact with you.

Amnesty. A governmental act or pardon that typically offers reduced penalties designed to encourage you to come clean with past transgressions—such as failing to report all your income from a foreign bank account or other entity. The federal tax amnesty for undeclared offshore assets ends September 23, 2009.

Quiet Disclosure. When you file amended returns without first making a voluntary disclosure. Amended returns related to offshore accounts that were filed under quiet disclosure are currently being reviewed by the IRS.

Six Year Period. Generally, the statute of limitations for the assessment of tax, penalties and interest is three years. In the case of unreported offshore accounts or income, you must agree to a six year statute in order to qualify for a reduced penalty.

You might also like these posts

Article – Preparing for Hurricane Season Image source: By Nilfanion , via Wikimedia Commons. The map shows the tracks of all tropical cyclones which formed worldwide from 1985 to 2005.The Atlantic hurricane season begins June 1. While the 2014 season is expected to be a mild one, mild doesn’t mean storm-free. Getting ready early is a good idea—and early preparati...
Article — Locked Out Image source: UK, public domain, via Wikimedia Commons What’s on your computer? Your manuscripts? Work? Photos? What would you do if you were denied access to those files—if you were locked out by rogue hackers? If you’re shaking your head because you think nothing on your computer is of value to hackers, consider th...
Article — Tax Identity Theft Awareness Week Image source: Taxes are scary enough, without adding tax identity theft to the mix. The costs—$3.6 billion a year according to an estimate by the US Treasury Inspector General for Tax Administration—are scary, too. Unfortunately, both tax ID theft and the costs are on the rise. The US Federal Trade Commission...
Article — Your 2013 Federal Income Tax Return Image source: Whether you’re a part- or full-time freelancer, receiving income means filing a tax return. Here are three things to keep in mind as you look back at your 2013 business activity. Dates: The IRS will begin accepting 2013 business returns on Monday, January 13, 2014. For individual returns, the da...

We write. Visit us in Carpenter Country, a magical place that, like our stories, is unreal but not untrue.

Posted in Articles Tagged with: ,