Do you have assets outside the USA?
Are you a part-year resident or do you have a dual-status year?
Do you own an interest in a foreign entity including corporations, partnerships and trusts?
Did you receive a gift from someone outside the USA?
If you have answered “YES” to any of these questions, you almost surely have special tax filing requirements.
There are 2 agencies and two separate annual filings involved:
US Treasury
Under the FinCEN rules, every year the US Treasury wants to know what bank accounts and other financial assets you may have overseas. The report to the U.S. Treasury is due by October 15 each year.
Internal Revenue Service
Under the FATCA rules, the IRS wants to know what financial and other income-producing assets you have overseas and what income each asset produced. This disclosure becomes part of your tax return.
Disclosure Issues
Where there is foreign ownership of a U.S. company of 25% or more, the law requires extensive disclosure. Where there is ownership of a foreign company by a U.S. company or U.S. taxpayer, there is similar extensive disclosure required.
An issue that is complex and rife with potential difficulties with the IRS and others is intercompany transactions, i.e. transactions between the foreign company and the U.S. one. This includes: transfers of goods (where transfer pricing is a critical exposure issue), investments, return of investments, loans, repayment of loans, interest, dividends, and repatriation of profits.