FinCEN Reporting and Real Estate Investment
The Bank Secrecy Act (BSA) obligates financial institutions to detect and prevent money laundering and other illicit finance activities. Since the enactment of the Patriot Act, financial institutions and business have been required to actively implement policies that prevent the flow of illicit funds through their accounts and to periodically report on the financial activities of their customers. The Financial Crimes Enforcement Network (FinCEN) is the U.S. agency that collects and analyzes this information. FinCEN also works with foreign governments to combat the financing of terrorist activities, domestic and international money laundering, and other financial crimes that transcend national boundaries.
The tax attorneys at Moskowitz, LLP handle numerous cases involving law enforcement investigations that are supported by domestic and international FinCEN data. We have extensive experience with tax reporting issues and our firm’s main focus is criminal tax defense.
Bank and taxpayer reporting requirements
Required U.S. financial institution and business reporting to FinCEN is intended to ensure that U.S. taxpayers are in compliance. This includes submission of the following reports:
- Currency Transaction Report (CTR) for all currency transactions over $10,000, including deposits, withdrawals, currency exchanges, transfers and payments
- Suspicious Activity Report (SAR) if the institution suspects that a customer is depositing and/or transferring corrupt money or is otherwise violating the law
- Designation of Exempt Person report exempts a customer from CTR reporting
U.S. persons, individuals, corporations, partnerships, LLCs and trusts must provide timely information regarding their foreign accounts. Taxpayer FinCEN reporting includes:
- Report of Foreign Bank and Financial Accounts (FBAR) on financial accounts held in a foreign country valued at more than $10,000 at any time during the calendar year
- Report of International Transportation of Currency or Monetary Instruments (CMIR) for a person or institution that mails or otherwise transports more than $10,000 in currency, traveler’s checks or other monetary instruments into or out of the U.S.
- Report of Cash Payments Over $10,000 Received in a Trade or Business must be filed whether the cash was received in a single transaction or in a series of related transactions
A failure to comply with offshore asset reporting requirements can result in significant civil penalties, criminal prosecution, and even jail time. It is crucial to have attorneys on your side who are experienced in civil and criminal tax defense and are familiar with FinCEN reporting requirements.
Reporting Real Estate Investments
Although there are no FinCEN reporting requirements for overseas real estate holdings, you must report bank accounts used to manage rental income. In addition, the value of real estate held by partnerships, LLCs, or trusts must be included in the valuation of those entities. FinCEN is also stepping up action on suspicious domestic real estate activities, particularly all cash real estate acquisitions and purchases made by buyers from foreign countries rife with corruption.
San Francisco tax attorneys
Protect your assets by retaining a reputable firm with a broad and comprehensive understanding of real estate and tax law. The attorneys at Moskowitz, LLP are concerned with ultimate outcome of your investment strategies and will aggressively defend you if criminal tax charges are filed. Call us at (888) 829-3325 or (415) 394-7200.