The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) recently announced plans to propose a new disclosure requirement for U.S. taxpayers with offshore cryptocurrency accounts. If the proposal moves forward, all taxpayers who own more than $10,000 in cryptocurrency held in offshore accounts would be required to file FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR) on an annual basis.

If you own offshore assets, you may need to file more than your state and federal income tax returns on April 15. You may have an obligation to disclose your offshore assets to the Internal Revenue Service (IRS), the Financial Crimes Enforcement Network (FinCEN), or both; and, if you do, you will need to file the requisite forms to avoid exposure to substantial penalties. Here, Virginia international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains the offshore asset disclosure requirements for 2021.

For many people, 2020 was a year that can’t be forgotten soon enough. But, while 2020 was difficult and indeed tragic for many families, it is important to take the lessons we learned during the year with us into 2021.

U.S. taxpayers with financial assets overseas have an obligation to report these assets to the federal government. While there are certain thresholds, most individuals and entities with offshore financial assets will need to report them, and failing to do so can lead to substantial penalties. In order to avoid these penalties, it is strongly advised that all U.S. taxpayers with offshore assets consult with a Virginia international tax attorney.

If you follow cryptocurrency news, you may have read that the Internal Revenue Service (IRS) is sending yet another round of warning letters to cryptocurrency traders and investors. If this news has you concerned, you will need to carefully review your prior years’ tax filings, and you will want to work with an experienced Virginia tax attorney to make sure that you are not at risk for serious consequences.