This is where things can go south quickly, if you knowingly did not file a FBAR. This is known as a willful violation and the sanctions can be severe.
In previous chapters, I have walked you through specific forms you need to file if you have any financial ties to any foreign entities, whether they are business or personal. International transactions are already on the IRS’ radar, so you do not want to do anything to move closer to their bull’s eye.
Here is yet another form you need to file surrounding any foreign accounts or other assets you may own or be associated with. This one deals with foreign corporations. If this speaks to you, keep reading.
There are many information forms associated with international taxes and we are not sugar-coating this — they are complicated. To add to the angst, failure to file these forms or not file them on time can incur hefty penalties.
If you are a foreign business or person that does business with the U.S., then you are subject to U.S. income taxes. Some examples would be if your business has an office that generates income located in the U.S. or if a company owns rental property in the U.S. from which it derives income.
During the summer of 2020, California’s political machinery continued to whine and hum. As its populace sheltered in place with COVID-19, two tax bills were introduced on the state’s Assembly floor.
The people who administer state tax laws generally show up in the news only when a newsworthy case is reported, typically one involving tax evasion, a “big fish” going to jail for not paying taxes.
In an earlier chapter, we touched on wage garnishment as a means for the FTB to collect unpaid taxes. However, the other side of the fence can be if you are an employer and are called upon by the FTB to garnish wages of any of your employees.
There are certain types of people that will go to great lengths to save money. I’m not talking about eating a strict diet of ramen noodles and taking the bus when you could afford to drive – I’m talking about tax avoidance.