Americans living in Israel may be unaware of the 2010 Foreign Account Tax Compliance Act (FATCA) that requires international financial institutions to turn over all the information on U.S. account holders in July 2014. The IRS could take half of their maximum account balance for holding an unreported account in Israel. However, new indications show that Israeli banks have already begun turning over this information, which could cause trouble for these account holders.
"If you're American, you have real exposure if you haven't done things right. If you don't file that and the government decided it was willful, you can go to jail and have to pay 50 percent of the highest balance in the account for each account," said Offshore Tax Compliance Partner Kevin Packman. "You can quickly find yourself facing huge civil penalties, and it can go criminal."
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