Many individuals who immigrate to the United States don’t consider their bank accounts or investments in their country of origin to be “foreign” assets which require financial disclosure. It’s much clearer when the term “non-U.S. financial accounts and assets” is used. Unfortunately, these misconceptions can result in penalties.
Cendrowski Corporate Advisors can simplify the process, helping you determine when you’re required to file financial disclosures of foreign assets.
Defining Foreign Financial Assets
People who have signature authority over foreign financial accounts and investments of their relatives for inheritance purposes sometimes don’t consider the accounts as belonging to them. However, by law, all of these financial assets will need to be disclosed, and penalties are imposed for failure to file. Misunderstanding the filing requirement rarely qualifies for any relief on the resulting penalties.
Talking to Cendrowski Corporate Advisors’ international tax specialists about your situation can clarify what needs to be disclosed. Taking this first step often mitigates painful penalties for improper financial disclosure of assets.
Client Success Story: Properly Managing Foreign Financial Assets
Cendrowski Corporate Advisors was engaged by a family that was originally from India, living in the U.S. The family owned close to 20 foreign financial assets and were signers on foreign bank accounts for some relatives. Because they frequently traveled to their home country, they wanted to maintain easy access to cash. Initially, they didn’t realize these foreign financial assets needed to be disclosed on the Foreign Bank Account Report and the IRS required additional reporting.
After discussing the disclosure requirements, they decided to consolidate their assets and arrange for other relatives, still residing in India, to become signers on some foreign accounts. Our team helped them with the disclosure requirements and created a plan for simplifying the future disclosures.