New York is a very cosmopolitan city with people from all over the world living and working here.Unlike many other countries, United States citizens, and Green Card holders which work here, must report their worldwide income. Many people have called this office with regard to this issue. Is there a way they don’t have to declare their worldwide income?The answer is NO. If you are a Green Card holder, or a United States citizen you must declare your worldwide income. However, there are credits that you may take for taxes you pay to other countries as well as credits for housing, and you are able to exclude income based on other factors as well.
At the minimum, the income must be declared. This also includes declaring foreign bank accounts, broker, and asset holdings (see website FBAR discussion for further discussion on this issue).
Recent Swiss Case Involving US Green Card Holders
For U.S. citizens and Green Card holders, you are required to report this income. In the case recently reported,anAmerican person livingin Switzerland, failed to do so and late filed for 2008 and 2009 and was sentenced to 15 months in prison. This was upheld as their 2012 and 2014 Returns were misleading and had every reason to believe they had committed tax evasion. In another case, A Swiss Executive pled guilty to tax fraud conspiracy involving wealthy American citizens living in Switzerland. In that case he helped Americans conceal over $60 million in assets.
BEST PRACTICES
In simplest terms, you must file if you are living abroad. If you are living here, you mustfile and declare your worldwide income. For more information on this issue see:
It’s simply just not worth the risk of trying to conceal your income from overseas and other sources. The IRS is the most aggressive and complete collection agency in the world, with offices not just in the United States but overseas as well.
There are country-to-country information sharing agreements of income. American citizens living in Switzerland have their bank account information reported to the IRS.
If you have questions regarding theseor other issues or concerns, please contact our office at 212-387-7880 or email at daniel@dmsilverlaw.comto discuss it for free, no obligation half-hour consultation. We have helped numerous people with these issues in the past and would like to help you in the future.