Complex Tax Issues
International Tax Services
Key Takeaway
International tax compliance failures carry the most severe penalties in the tax code — including criminal prosecution. If you have unreported foreign accounts or offshore structures, voluntary disclosure may be your safest path forward.
The IRS Knows About Your Foreign Accounts. They’re Waiting to See If You Report.
FATCA, FBAR, Form 3520, Form 5471, Form 8938 — the alphabet soup of international tax reporting is confusing and the penalties for non-compliance are staggering. A single missed FBAR can result in penalties of $10,000 per account per year — or up to 50% of the account balance for willful violations.
Thanks to FATCA and international information-sharing agreements, the IRS now receives data on foreign accounts and income from over 100 countries. If you have foreign financial accounts, foreign trusts, or foreign business interests and haven’t been reporting them, the IRS likely already knows — they’re just waiting to see if you come forward on your own.
We help clients come into compliance through voluntary disclosure programs, defend against IRS penalties for past non-compliance, and establish ongoing reporting systems to stay compliant going forward.
From Our Practice
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What We Handle
International Tax Services
FBAR & FATCA Compliance
We prepare and file FBARs (FinCEN 114), Forms 8938, and other foreign account reports. We also help clients catch up on missed filings through streamlined or voluntary disclosure procedures.
Voluntary Disclosure
For taxpayers with unreported foreign accounts or income, we navigate the IRS Streamlined Filing Procedures and Voluntary Disclosure Practice to resolve exposure with minimized penalties.
Foreign Trust Reporting
Forms 3520 and 3520-A for foreign trust reporting are complex and penalties for non-filing are severe. We prepare these forms and defend against penalty assessments.
Foreign Corporation Reporting
Forms 5471, 5472, and 8865 for foreign corporate interests. We ensure compliance and defend against penalties for late or incomplete filings.
International Tax Controversy
IRS examining your international returns? We represent taxpayers in audits and appeals involving foreign income, foreign accounts, and international reporting obligations.
Expatriation Tax Planning
Renouncing U.S. citizenship or long-term residency has significant tax consequences. We plan expatriation to minimize the exit tax and ensure compliance.
Understanding the Requirements
International Tax: What U.S. Taxpayers Need to Know
What is an FBAR and who must file?
The Report of Foreign Bank and Financial Accounts (FBAR) must be filed by any U.S. person with a financial interest in or signature authority over foreign financial accounts if the aggregate value exceeds $10,000 at any time during the year. The filing deadline is April 15 with an automatic extension to October 15.
Penalties for non-filing are severe: up to $10,000 per violation for non-willful failures, and up to the greater of $100,000 or 50% of the account balance for willful violations.
What is FATCA and how does it affect me?
The Foreign Account Tax Compliance Act requires foreign financial institutions to report information about accounts held by U.S. persons directly to the IRS. It also requires U.S. taxpayers to report specified foreign financial assets on Form 8938 if they exceed certain thresholds.
FATCA means the IRS likely already has information about your foreign accounts from foreign banks. Coming into compliance voluntarily is far better than waiting for the IRS to contact you.
What are the Streamlined Filing Procedures?
The IRS Streamlined Procedures allow taxpayers who can certify that their failure to report foreign accounts or income was non-willful to come into compliance with reduced penalties. For U.S. residents, the penalty is 5% of the highest account balance. For those living abroad, the penalty may be zero.
We evaluate whether you qualify for the Streamlined Procedures and prepare the required certifications, amended returns, and delinquent information returns.
What happens if I don't report my foreign accounts?
The IRS can assess penalties of up to $10,000 per account per year for non-willful violations and up to 50% of account balances for willful violations. Criminal prosecution is possible for egregious cases. Additionally, the statute of limitations for the underlying tax return doesn’t start running until all required international information returns are filed.
Coming forward voluntarily always produces better outcomes than waiting for the IRS to find you. The earlier you act, the more options are available.
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Why Brotman Law
International Tax From Attorneys Who Understand the Stakes
Penalty Defense
International tax penalties are among the most severe in the code. We fight to minimize or eliminate penalties through voluntary disclosure, reasonable cause, and appeals.
Voluntary Disclosure Expertise
We've guided dozens of clients through Streamlined Procedures and Voluntary Disclosure with successful outcomes.
Full Compliance Solutions
We don't just fix the past — we establish ongoing reporting systems to keep you compliant going forward.
Multi-Jurisdictional Knowledge
We understand the tax treaties, totalization agreements, and foreign tax credit rules that affect your cross-border tax position.
Confidential Representation
Everything you share is protected by attorney-client privilege — critical when disclosing previously unreported foreign accounts or income.
IRS Examination Defense
If the IRS is already examining your international returns, we provide aggressive defense and negotiate favorable resolutions.
Learn More
International Tax Guides & Resources
Free Tax Resources
Guides to FBAR, FATCA, and international tax reporting requirements.
Read the Guide →Free GuideCriminal Tax Defense
Willful international tax violations can lead to criminal prosecution. Learn about our criminal defense practice.
Read the Guide →Free GuideIndividual Tax Strategy
Optimize your overall personal tax position including international income.
Read the Guide →Frequently Asked Questions
International Tax FAQs
I have a foreign bank account but didn't know I had to report it. What do I do?
Contact us immediately. The Streamlined Filing Procedures are designed for taxpayers who were non-willful in their failure to report. We evaluate your situation, prepare the required filings, and resolve your exposure with minimized penalties.
What is the penalty for missing an FBAR?
Non-willful violations carry a penalty of up to $10,000 per account per year. Willful violations carry a penalty of up to the greater of $100,000 or 50% of the account balance per year. Criminal penalties are also possible for willful violations.
I have a foreign inheritance. Do I need to report it?
Yes. Inheritances from foreign persons exceeding $100,000 must be reported on Form 3520. The inheritance itself may not be taxable, but failure to report it carries a penalty of up to 25% of the amount received.
Do I need to report cryptocurrency held on foreign exchanges?
This is an evolving area. The IRS has indicated that virtual currency held on foreign exchanges may trigger FBAR and FATCA reporting requirements. We advise conservative compliance pending final regulatory guidance.
Can the IRS find out about my foreign accounts?
Almost certainly. Under FATCA, over 100 countries automatically share financial account information with the IRS. International information-sharing has made it extremely difficult to maintain undisclosed foreign accounts.
What is the Voluntary Disclosure Practice?
The IRS Voluntary Disclosure Practice is a formal process for taxpayers with willful non-compliance to come forward. Unlike the Streamlined Procedures, it’s for cases involving intentional violations. It typically results in higher penalties but provides protection from criminal prosecution.
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