The Internal Revenue Service is reminding U.S. citizens and resident aliens, including those with dual citizenship, of the U.S. tax liability and filing requirements coming due, if applicable.
Anyone with a foreign bank or financial account must also remember the upcoming deadline that applies to reports for these accounts, often referred to Report of Foreign Bank and Financial Accounts, or FBARs, is the same as for a federal income tax return.
The 2017 FBAR, Form 114, must be filed electronically with the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, by April 17.
In general, the FBAR filing requirement applies to anyone who had an interest in, or signature or other authority, over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2017, according to the IRS.
“Because of this threshold, the IRS encourages taxpayers with foreign assets, even relatively small ones, to check if this filing requirement applies to them,” adding that the form to do so is only available through the BSA E-Filing System website.
The IRS also reminded taxpayers Monday that the Offshore Voluntary Disclosure Program will close on Sept. 28.
“Taxpayers with undisclosed foreign financial assets still have time to use OVDP before the deadline,” and can find more information on this at OVDP FAQs.
The IRS stated that it will “continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, whistleblower leads, civil examination and criminal prosecution.”
The IRS added that it continues to use streamlined filing compliance procedures that will remain in place and be available to eligible taxpayers. But, as with OVDP, the IRS said it may “end the streamlined filing compliance procedures at some point.”
An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduce or eliminate U.S. tax liability. These tax benefits are only available if an eligible taxpayer files a U.S. income tax return.
A special extended filing and payment deadline applies to U.S. citizens and resident aliens who live and work abroad.
For U.S. citizens and resident aliens whose tax home and abode are outside the United States and Puerto Rico, the income tax filing and payment deadline is June 15. The same applies for those serving in the military outside the U.S. and Puerto Rico.
Nonresident aliens who received income from U.S. sources in 2017 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens is April 17.
U.S. citizens and resident aliens must also report any “worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return,” the IRS states.
Certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Foreign Financial Assets. “Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds,” according to the IRS.