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Anyone can open an offshore bank account with just a few hours of work. Each offshore bank and foreign jurisdiction has its own requirements, so youll have to do some research to find the specific requirements relevant to your situation.
A foreign bank account is a bank account held in any country outside your country of citizenship or residence.
One of the main catalysts for the IRS to learn about foreign income which was not reported is through FATCA, which is the Foreign Account Tax Compliance Act. In ance with FATCA, more than 300,000 FFIs (Foreign Financial Institutions) in over 110 countries actively report account holder information to the IRS.
Per the Bank Secrecy Act, every year you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts.
Penalties for failure to file a Foreign Bank Account Report (FBAR) can be either criminal (as in you can go to jail), or civil, or some cases, both. The criminal penalties include: Willful Failure to File an FBAR. Up to $250,000 or 5 years in jail or both.
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People also ask

The Foreign Account Tax Compliance Act (FATCA) requires foreign banks to report account numbers, balances, names, addresses, and identification numbers of account holders to the IRS.
And, while it is absolutely legal to own a foreign bank account, there are some additional reporting and tax requirements that US persons should be aware of so that they can remain in IRS tax and reporting compliance and avoid unnecessary fines and penalties.
Failing to file because individual accounts are less than $10,000. Remember that the balance of all foreign accounts counts towards the $10,000 threshold. So if your client has two accounts with $6,000 each, theyll still need to file an FBAR since the accounts add up to more than $10,000.

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