Tax Reports For American Citizens

FBAR FORMS

All American citizens who have any financial accounts in Israel (or anywhere outside the US) which total $10,000 at any point during the year, even if only for 1 day are required to submit this form to the U.S. government.

Financial accounts include – bank accounts, retirement funds, Keren Hishtalmut, savings account, pension fund, provident funds, investment portfolio etc…

 

FINES FOR NOT REPORTING

The fines can be as high as 50% of the highest amount that was in the accounts during the course of the tax year and, in addition, may result in a criminal offense.

Anyone filing their FBAR before the U.S. authorities (either tax or anti-money laundering departments) contact them, will not be fined and no criminal charges will be filed against them.

Recently, many Israeli citizens who are also American citizens have been requested by Israeli banks to sign a W9 Form revealing their Social Security number. In addition, banks are requesting a waiver of secrecy. This allows the banks and the Israeli Treasury Ministry to report to the American authorities all activity in the bank accounts of U.S. citizens.

In 2010, the U.S. Congress legislated the Foreign Account Tax Compliance Act (FATCA)– whose goal is to prevent U.S. Citizens who live outside of the borders of the U.S. from avoiding tax payments. The Israeli authorities have agreed to actively apply the FATCA legislation in Israel, transferring all bank account information to the American tax authorities in an organized fashion.

The meaning of this cooperation is that accounts held by American citizens will be exposed to the American tax authorities and sooner or later they will contact who did not report.

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