Many Bay Area residents have international tax exposure. Some are foreign nationals. Others have business interests in Canada, China, or other countries. Finding just your average CPA firm will not cut it. You need a CPA firm that really “gets” how to deal with international issues. At Safe Harbor LLP, one of our specialties is international tax return preparation.
Quite a large number of San Francisco residents have tax liabilities in Canada especially, and we are fully conversant with all the tax laws there. But having assets in overseas countries can also create tax liabilities here in the US which is why our international tax return preparation can help those with such liabilities.
You may be a US citizen, permanent resident, or a foreigner residing in the US, but it is essential that you have a CPA firm that understands all the possible issues. One of the most common ones is FBAR – Foreign Bank and Financial Accounts – which is one of our specialities, along with OVDP – Offshore Voluntary Disclosure Program. Many residents fall foul of OVDP because they fail to include income from overseas investments or other foreign assets. As a general rule, you have to pay tax on all income, regardless of where it originates, if you are a US citizen or foreign resident. (Note that the OVDP program is no longer active; reach out to your tax advisor to tips on compliance if these issues might affect you).
You Could Be liable For Criminal Investigation Even If It Was An Oversight
Whether or not your overseas income is taxable, you are required to report all foreign investments and assets on your annual tax return if their total income amounts to $10,000 or more. You might also have an interest in a foreign partnership, trust, or corporation. The problem here is that, even if it is an oversight on your part, you can still be liable for heavy civil penalties and even criminal investigation.
Voluntary Disclosure can provide you with three benefits, the first of which is that it reduces the severity of civil penalties, and it also will usually remove the risk of criminal investigation and prosecution. In addition, it will allow you to work out roughly how much it is going to cost to get up to date with your federal tax requirements. Even if your failure to disclose overseas income was because you were not aware of the law, you still don’t want to risk a civil or even criminal investigation into your circumstances.
If you let us handle your international tax return preparation, we can help you with all of these possible liabilities. We are fully aware of all the relevant laws and issues surrounding overseas income and we can help you to become fully compliant and up to date.