The Internal Revenue Service has intensified its investigation of offshore accounts and foreign income, reports The Wall Street Journal.
The efforts of the IRS to recover some of the billions of dollars each year lost to offshore tax evasion is extending beyond the government’s efforts to force Swiss bank UBS to release the names of 52,000 American account holders in order to find tax evaders.
The Foreign Bank Account Report, or FBAR, is a once-obscure tax form that forces taxpayers to provide information on income they earn or bank accounts they hold overseas.
The requirement applies to U.S. citizens and residents who have offshore accounts totaling $10,000 at any point during the year.
The penalties are increasingly harsher than in years past. Those who have failed to report offshore income, even just a few hundred dollars, could be subject to a $10,000-a-year penalty going back several years.
The IRS can also impose a penalty of $100,000, or one half the value of the account. The deadline to submit forms is September 23. But the government expects more than the 386,000 forms filed last year. Those who already paid taxes on foreign income but didn’t file the form may escape harsh penalties.