As the HIRE Act begins to phase in, U.S. Citizens and residents are already required to fill out the new 8938 form with their tax returns. If you are a U.S. expat reading this article, you might be required to fill out these forms or risk severe penalties including up to five years in jail. Yes, five years in jail for failing to file the form.
The law is clear. If there is any structure between you and the title in your name—a bank trust, or a timeshare fractional corporate structure—then the asset must be reported on the 8938 form. Remember, failure to report is punishable with up to five years in jail.
I say that jail thing twice because the U.S. wants a reporting of all assets of all U.S. citizens and residents. There’s no more “Scout’s Honor” when it comes to the Treasury Department. Ronald Reagan’s dictum, “Trust but verify,” is in full implementation and they have the computer power to process massive amounts of data from millions of sources worldwide. They have also linked the INS and IRS computer files, so “Welcome Home” at immigration might take on a whole new meaning in the near future.
So, as we’ve been saying for nearly two decades, file the forms, follow the rules and enjoy a phenomenal life overseas. But don’t get tripped up with stuff you didn’t know you didn’t know. Ignorance is no excuse for the law, except of course for those in congress who have to pass laws before they read them.
At an upcoming conference in January, Morey Glazer and Joel Nagel will be presenting the fine details of this law along with the tax reporting and compliance issues that U.S. citizens must follow. The conference is part of our rotating series of Hemispheres Publishing Asset Protection and Global Investment seminars hosted around the world. Our last conference, held last month in Belize, sold out. The next one will be held in Managua, Nicaragua, January 15-20. Click here to receive the full agenda and registration information.
A special one-day pass is available for expats living in Nicaragua who want to hear the tax and compliance sessions presented by Nagel and Glazer on Day-2 of this fantastic event.
Sign up now for this informational conference focusing on critically important information for life in a rapidly globalizing world. Click here to receive the one-day pass that includes a full day of sessions, lunch, and a networking cocktail party with attendees and presenters alike.
Mike Cobb is CEO and Chairman of ECI Development. His blog on expat life in Nicaragua can be read at http://www.mikesgringolife.com. Mike will be co-hosting The Central American Advantage Conference in January.