Unreported Foreign Income Attorney
U.S. citizens and residents are taxed on worldwide income — including foreign bank interest, dividends, rental income, business profits, and investment gains held abroad. Unreported foreign income triggers FBAR penalties, FATCA penalties, and potential criminal prosecution.
What Foreign Income Must Be Reported?
Foreign bank account interest and dividends
Foreign rental property income
Foreign business income (including foreign partnerships)
Foreign pension and retirement distributions
Gains from sale of foreign property
Foreign inheritance and gifts (over $100,000)
Income from foreign trusts
Cryptocurrency held on foreign exchanges
The Penalty Stack for Unreported Foreign Income
Unreported foreign income can trigger multiple overlapping penalty regimes simultaneously.
Income Tax
Tax on the unreported income plus 20–75% civil fraud penalty
FBAR Penalty
Up to $10,000 (non-willful) or $100,000+ per account per year (willful) for the underlying account
Form 8938 (FATCA)
Up to $10,000–$50,000 penalty for failure to file Form 8938 disclosing foreign assets
Failure to File Penalties
5% per month on any unreported tax owed, up to 25%
Interest
Compounding interest on all unpaid tax from the original due date
Criminal Prosecution
For willful non-disclosure, up to 5 years in federal prison per count
The Solution: Voluntary Disclosure Before IRS Contact
The single most important factor in your outcome is whether you come forward before the IRS contacts you. Voluntary disclosure programs dramatically reduce penalties and eliminate criminal risk.
Streamlined Filing
For non-willful violations — 5% offshore penalty (or 0% for expats), waived accuracy penalties, full compliance achieved.
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FBAR Compliance
File all delinquent FBARs through the proper program before the IRS audits your accounts.
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Criminal Voluntary Disclosure
For willful violations — structured disclosure with DOJ Tax Division to avoid criminal prosecution.
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