Of course you filed the FBAR form for the past 7 years, right? And you declared Earned Israeli Interest on your bank account and keren hishtalmut, right? Or perhaps that savings plan where you squirreled away a few shekel a month hoping you'll have something to pay for your kids' weddings...you declared that as well, right? It may have been pennies worth of interest, but you had to declare it on your 1040.
For a scary article on the subject, the JPost calls in a US Tax Attorney, who paints a rather bleak (perhaps alarmist?) picture.
Applicants to the [voluntary disclosure] program need to hire a tax attorney, as they are in effect taking part in a criminal proceeding, admitting to breaking US law.Is this more than a Tax Attorney trying to drum up business?
Wolf said American-Israelis shouldn't think they're okay simply because they have filed their US tax returns.
"It's irrelevant," he told the Post. "You need to file the American tax return form and report the worldwide taxable income, in addition to filling out the FBAR form in which you declare your accounts around the world," he said, referring to the US Treasury Department's Form 90-22.1, "Report of Foreign Bank and Financial Accounts.""You have to get your name into the program before the deadline," stressed Wolf. "It might be all legitimate - but you need a US tax attorney to register you and your activities for the past six years with the voluntary disclosure program. It's serious, and it's a criminal offense, period."
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Wherever I am, my blog turns towards Eretz Yisrael טובה הארץ מאד מאד