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Globalization has shrunk the world and it is now a smaller place to stay. People travel to foreign countries each and every day for work, studies and leisure. Even businesses are booming, expanding and opening new divisions and branches in every corner of the world. People, expatriates or citizens with green cards, who are staying in other countries to earn money, also need to abide by the rules to pay taxes to them and disclose all of their bank accounts to them. Foreign bank account tax is a major concern of International authorities like IRS (Internal Revenue Service) in United States. Most of the times foreign expatriates become classified as tax evaders as they do not report their bank accounts outside United States. The US government has implemented FATCA (Foreign Account Tax Compliance Act) which governs people to disclose their financial bank accounts outside United States. Also the foreign banks and financial institutions are required to report to IRS about the accounts of their foreign expats.
Unreported Foreign Bank Account Tax and income can lead to serious penalties and jail time. To avoid this, people can take the help of International tax accountant or attorney and come forward to disclose all their possible income sources and bank accounts under a program called OVDP (Offshore Voluntary Disclosure Program). These rules also apply on US citizens who have bank accounts and source of income outside United States. IRS takes a hard approach to people who have been evading tax and in a matter of time, they find out every income source. Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) is provided by IRS for this reporting purpose.
Only an experienced International Tax accountant can help you guide through this diligent and complex process. Only he/ she can protect your assets and financial health from any criminal pitfalls that may arise during the process. If you hire an International Tax Accountant, it also shows that the expat has good intent to be through and is honest about his income to the Government of Foreign land. An international Tax accountant who is very familiar with laws also helps an expat in saving money from provisions like foreign earned income exclusion, credits and deduction from foreign housing. Without an international tax accountant, the expat can over or under calculate his taxes if he wants to file tax return himself. Either he suffers loss of money or attracts IRS scrutiny.
Tax filing in foreign countries can be a complex work as the expat may not understand all the laws and legal guidelines. This applies to individual expat, organization or a Multi National Corporation (MNC). Even a bigger organization needs advice from a professional International Tax accountant for filing their tax returns.
