Offshore accounts in a post-FATCA market

The Foreign Account Tax Compliance Act (FATCA) went into effect in 2010. This law requires all foreign institutions outside of the United States to report assets and identities of account holders that are United States citizens. Failure to comply can result in serious ramifications, including steep financial penalties.

How has this law impacted the industry? According to a recent piece in the International Adviser, the law has led to one big change: specialization. After the passage of FATCA banks could not simply take on clients with citizenship in the United States without knowledge in these laws. 

In order to find success dealing with U.S. citizens, foreign financial institutions were required to specialize in application of this law. As noted in the publication, the penalties wielded by the U.S. for violation of FATCA were effective. Banks either complied with the law or went out of business.

Has FATCA impacted whether U.S. citizens use foreign accounts? The law has led to additional requirements and hurdles for U.S. citizens with foreign accounts. One hurdle is the fact that a number of foreign banks will not do business with U.S. citizens to avoid dealing with FATCA.

Advantages remain. Foreign financial institutions willing to take on U.S. clients are abundant. In the current market, some are pulled by the comfort of jurisdictional diversification that comes with the presence of accounts in countries other than one’s home. Other benefits include ease of use for those who live or travel extensively abroad and business opportunities for those with global corporations.

Those who choose to maintain foreign financial accounts must do so wisely. Various reporting requirements are present and a failure to properly disclose these assets can lead to questions from the Internal Revenue Service (IRS). Due to these complexities it is wise to seek legal counsel in the event the IRS contacts you with questions about such accounts.

No Comments

Leave a comment
Comment Information
  • ABA | American Bar Association
  • AV Preeminent | Peer Rated for Highest level of Professional Excellence | 2018
  • Virginia State Bar | 1938
  • Super lawyer | 2018
  • DC Bar
  • American Bar Academy of Attorney - CPAs | The power of the dual view
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Map & Directions

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Annapolis Office
888 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Map & Directions

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Map & Directions

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Map & Directions