More Debits & Credits Posts

Keep on Top of Clients’ Foreign Holdings

November 4, 2010

It’s no secret that the Internal Revenue Service has been especially vigilant in the past couple of years about tracking down hidden foreign sources of income.

That’s been particularly true in the case of UBS, where the IRS has been poring through the names it has received so far from the bank and the Swiss government, as well as from its own voluntary disclosure program. One of the main ways that the IRS has been encouraging voluntary disclosure is through the filing of the Report of Foreign Bank and Financial Accounts, or FBAR, forms. When the IRS doesn’t receive an FBAR, but finds out a taxpayer nevertheless has a foreign bank account, it could spell trouble.

Maury Cantine, partner-in-charge of the alternative investment group in Marcum LLP’s tax department, gave an update on the FBAR filing requirements at the New York State Society of CPAs’ Investment Companies Conference on Wednesday.

He also advised attendees to file foreign tax returns when investing in offshore funds and foreign-issued securities where the gain may be taxable, as in countries like Brazil and India.

“The smart thing to do is to plan ahead,” he said. “Clients may do business where they haven’t done business before.”

One year they may be doing business in Brazil and the next year in Spain, he noted. It pays to do business abroad, but that doesn’t mean the IRS and foreign tax authorities don’t want to collect their share of your client’s gains.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.