All news

Investors’ foreign financial holdings are coming under increasing scrutiny

September 06, 2009

The recent scandal surrounding Swiss banking giant UBS AG has shone a spotlight on foreign bank accounts, but many investors are finding out that they also have to report other foreign assets to both the Internal Revenue Service and the Treasury Department.  Failure to do so, reports Darla Mercado in this week’s InvestmentNews article “Foreign-account holders may face double trouble,” could result in fines and prosecution.  These non-bank offshore assets include some foreign life insurance policies, trusts with foreign financial accounts, and some foreign annuities, for example.   But even those who aren’t sophisticated overseas investors can get into trouble: One example is immigrants who obtain residency in the United States, receive assets from their parents in another country, and don’t realize they have to file a Foreign Bank Account Report.  “It’s very common for European and Asian families with significant wealth,” says Troy Thompson of Thompson Advisory Services in Portland, Oregon.  “The father will distribute shares of stock in a privately held family firm, but it might not be clear to the kids, or they might not think it’s really theirs, because the dad is still alive.”  To read the entire article, click here.