Thursday, September 26, 2019
International currenies Essay Example | Topics and Well Written Essays - 500 words
International currenies - Essay Example Additional disclosure FACTAs new reporting requirements are much broader than the Report of Foreign Bank and Financial Accounts (FBAR). This means that individuals who may not have been subject to FBAR filing obligation may still be subject to the new reporting requirement. The major differences between FACTA and FBAR are: (1) FACTA has a higher asset threshold for disclosure at $50,000; (2) FACTA applies to a wider range of assets; (3) FACTA must be filed as an attachment to an individual tax return unlike FBAR which is filed independently of tax returns with the Treasury Department. In addition to that, FACTA added a new withholding system that requires foreign financial institutions with substantial US owners to disclose information regarding the US taxpayers. Increased penalties For starters, FACTA favors the IRS with a presumption that it is the obligation of the taxpayer to file her disclosure if she has specified foreign financial assets (Packman and Rivero 45). It also requ ires shareholders in a passive foreign investment company (PFIC) to file an annual information return disclosing their ownership regardless. The minimum penalty for failure to submit the required disclosure without reasonable cause is $10,000 which would increase by $10,000, for every 30-days of failure to submit the required disclosure, to a maximum of $50,000.