9. Holding Assets in Foreign Accounts
Unlike in years gone by, when assets held in foreign bank accounts did not receive as much scrutiny, today’s tax laws have far more strict requirements regarding the reporting of said assets. As part of the Foreign Account Tax Compliance Act, taxpayers must report any assets valued at $50,000 or more in a foreign account.
The law has created a rather uncertain environment for today’s taxpayers who have foreign accounts. Now filers must reveal the highest dollar amount held in these accounts from the previous financial year.
The significant changes to this law have, because of its request for more transparency, making it more likely to trigger an audit, and the cost of ignoring these changes to the law can result in severe penalties.