http://iht.com/articles/2008/05/15/business/15tax.php In its hunt for wealthy Americans who have stashed money overseas to evade taxes, the U.S. government has turned to an obscure law enacted nearly four decades ago.
Under the law, originally aimed at rooting out laundering of drug money, citizens or residents of the United States must tell the Internal Revenue Service each year if they have any foreign bank or financial accounts holding a total of $10,000 or more. Income from the assets is taxed at ordinary rates of up 35 percent.
The law took effect in 1970, but many taxpayers have either ignored it or were not aware of it, and the Treasury Department has rarely enforced it.
...
The disclosure, known formally as a Foreign Bank and Financial Account Report and informally as an Fbar, is separate from a federal income tax return. The disclosure is also required of United States residents with signatory power over or a financial interest in at least 50 percent of a foreign account. And the definition of those who must file includes domestic estates, trusts, partnerships and corporations.
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Before 2004, the maximum fine for civil violations was $100,000, small change for those with millions of dollars or more hidden overseas.
But provisions in the USA Patriot Act aimed at stopping the financing of terrorists raised the maximum civil fine to $100,000 or half of the amount in the account, whichever is greater.
Criminal penalties are as high as $500,000 or half the account balance, and up to 10 years in jail.
Does anyone know? I may add that Libertarians came down hard on Kerry for his financial account provisions in the Patriot Act. I like their article (it was Reason) because at least they acknowledged that he did the work.
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