The Israel Supreme Court ruled that US citizens in Israel must comply with FBAR and all IRS reporting requirements and the consequences of FATCA. Israeli banks, investment houses and financial institutions have already begun to report the detailed personal and financial balance and transaction information regarding the “beneficial ownership interest” of those accounts directly to the IRS. This will allow the IRS to immediately compare the reports from Israeli financial accounts to those of US taxpayers and associated FBARs to verify compliance.
The information provided to the IRS includes the names, addresses, account numbers, account balances, aggregate interest paid or credited, and U.S. tax identification numbers of all US taxpayers and US citizens holding accounts in Israel. If you are a US citizen or US taxpayer with undisclosed funds in Israel, the IRS will have that information in the immediate future. The time to consider an offshore disclosure such as the OVDP or a streamlined domestic (foreign) offshore procedures application is now.
This decision follows every action against FATCA, both within the United States and around the world. The decision before US citizens and US taxpayers with money in an Israeli bank or financial institution is immediate: comply with IRS FBAR reporting requirements or face draconian penalties, interest and the risk of criminal prosecution and prison time for US income tax evasion.
It is better to make a disclosure to the IRS before the IRS comes knocking on your door for an IRS audit. The consequences are always less severe when the taxpayer comes clean with the IRS before the IRS contacts the taxpayer. US taxpayers and US citizens in Israel must comply with FBAR and offshore reporting requirements immediately.
The experienced international tax attorneys, accounting and tax preparation experts at Allen Barron are prepared to help any US taxpayer with undisclosed Israeli bank accounts, investment accounts or assets. We invite you to contact us at 866-631-3470 for a free consultation. Ask about the protections of the attorney-client privilege.