SHOULD YOU REPORT ASSETS ABROAD?
Surely you have ever heard from a friend or professional, about the many advantages that diversification to other countries has in the field of business. The most notable advantages of this type of diversification are the patrimonial protection and the reduction of taxes. In the United States, being a highly international country, it is not uncommon for a resident or citizen to have interests or accounts outside the country.
It is very important that when you have an interest, whether it is a financial account, a property, or a company, you should properly report it to the Internal Revenue Service (IRS). Many people understand the obligation to re?port annually all accounts they have in other countries, but they do not know that it is not only the accounts but also the companies and other assets covered by the law. They also do not know that if there is a foreign company who in turn owns an American company, you also have to report this fact.
If you fail to prepare any of the reports of these interests in other countries innocently, the fine is $ 10,000. Be very careful of penalties for not reporting when a foreign company has an investment in the United States or vice versa. If you have made use of globalization, and your business has an interest in a foreign company, it is of the utmost importance that you fill out the forms required annually to avoid this penalty. In the same way, if a foreign company owns a domestic company, the responsibility is the same.
The problem that exists today is that many accountants and lawyers are also unaware of these requirements and in the end, if this is not reported, you are the one who will take the consequences (not your accountant or lawyer). All this information is public and can be found on the IRS website at www.irs.gov.
Remember, reporting everything that you have on the outside and all that your outside entities have in the United States can’t be confused with having to pay any taxes. These are reports and not income statements.
If you have already passed the reporting deadline and you have not yet done so, you can still make the required reports and in many cases reduce or even eliminate the penalties. The problem is when you have not done so and the government has already notified you. In this case reducing the penalties is much more complicated and sometimes impossible.