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By: Rebecca K. Wohltman

Do you have a foreign investment account? Do you have signature authority over a foreign bank account? Did you receive a distribution from a foreign trust?

If the answer to either question is “yes,” you may need to affirmatively report any such transactions on Schedule B of your Form 1040. You may also be required to file an FBAR. Accountants may not think to ask these questions of all of their clients. However, an accountant’s failure to inquire about foreign accounts does not relieve a taxpayer of the significant penalties that may be imposed for failing to disclose foreign accounts. Depending on the situation, penalties can exceed the value of the account that was not disclosed.

If you have any foreign transactions or interests in any foreign accounts, make sure to discuss such transactions or accounts with your accountant when you meet with him or her in the coming months. It is critical to make sure these accounts and transactions are properly reported.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.