If you are a U.S. citizen, resident alien or legal permanent you have the duty to report to the IRS whether you have an account overseas in the particular year you are filing your taxes, the income generated by this account, and the country where the account is being held. Furthermore, if your foreign account is worth more than $10,000 you will have to file a Report of Foreign Bank and Financial Accounts (FBAR).
In 2013, a new law called FATCA (the Foreign Account Tax Compliance Act) will require foreign banks to disclose information about your account including the names of the U.S. beneficiaries. Countries including France, Italy, Germany, United Kingdom, and Spain have already agreed to comply with the new requirement and foreign banks who fail to disclose the information will be required to pay a 30% penalty of the income generated by the account.
Filing your taxes and complying with IRS requirements is an important duty as a citizen or resident of this country and it is the easiest way to avoid penalties and charges against you.
If you have any questions about this law, please do not hesitate to contact us.