Are you a Miami resident with foreign bank accounts, overseas investments, or international income sources? Maybe you're a globally mobile executive, an international business owner, or someone with dual citizenship navigating tax obligations in multiple countries? Or perhaps you've been filing U.S. tax returns but aren't confident your international reporting is completely accurate—you've heard about FATCA, FBAR, and foreign tax credits but your current accountant hasn't really explained how these apply to your specific situation?
You've arrived at exactly the right resource, and I'm genuinely glad you're here.
I'm writing this comprehensive guide with one specific purpose: to meet you, introduce Whittmarsh Tax & Accounting, and earn the opportunity to show you how specialized international tax planning eliminates compliance risks, minimizes your global tax burden, and prevents the devastating penalties that destroy internationally connected individuals who don't have proper guidance.
We specialize in helping internationally mobile residents in Miami, Aventura, and throughout South Florida navigate the extraordinarily complex world of cross-border taxation—including FATCA reporting, foreign account compliance, tax treaty optimization, controlled foreign corporation rules, foreign trust reporting, and the sophisticated strategies that separate compliant international taxpayers from those facing financial catastrophe.
Now, I understand you came here seeking information about managing your international tax obligations. And I'm absolutely going to deliver that—you'll learn about U.S. international reporting requirements, how to minimize double taxation, what compliance obligations you're facing, and the specific strategies that keep you compliant while minimizing your worldwide tax burden.
But here's the critical information that generic CPAs miss entirely: international tax compliance is one of the most heavily penalized areas of U.S. tax law. FBAR violations can reach $10,000 per account per year. FATCA penalties can hit $50,000 per form. Failure to report controlled foreign corporations can result in $10,000+ penalties per entity per year. These aren't theoretical—the IRS regularly assesses these penalties against internationally connected taxpayers whose CPAs didn't understand cross-border requirements.
Most internationally connected Miami residents are either completely non-compliant with U.S. international reporting requirements (creating enormous penalty exposure) or are massively overpaying taxes because their CPA doesn't understand foreign tax credits, treaty benefits, or cross-border tax planning strategies.
Generic American CPAs have never dealt with foreign corporations, don't understand PFIC rules, treat foreign trusts incorrectly, miss treaty benefits that could save thousands annually, and simply check boxes on international forms without actually understanding the complex rules governing cross-border taxation.
The consequences range from IRS penalties that can exceed the value of foreign accounts themselves, to paying 50%+ tax rates on foreign investments that should be taxed at 15-20% if structured correctly, to complete failure to report foreign entities creating criminal exposure in extreme cases.
That's the problem we solve at Whittmarsh Tax & Accounting.
We don't just prepare basic tax returns for Americans with simple W-2 income. We provide comprehensive international tax planning specifically designed for globally mobile individuals who need specialized expertise in foreign account reporting, tax treaty provisions, controlled foreign corporation rules, PFIC taxation, foreign trust compliance, and the hundreds of technical requirements that separate compliant international taxpayers from those facing financial disaster.
First, I'm going to explain the U.S. international tax reporting requirements that apply to Miami residents with foreign connections—FBAR, FATCA, foreign corporation reporting, foreign trust disclosure, and the complex web of forms that internationally connected taxpayers must file.
Then, I'm going to walk through the tax planning strategies that minimize your global tax burden while maintaining full compliance. You'll learn about foreign tax credits, treaty benefits, proper entity structuring for international operations, PFIC avoidance strategies, and how to coordinate taxation across multiple countries.
But here's my direct ask: if you're a Miami resident with foreign bank accounts exceeding $10,000, if you own interests in foreign corporations or partnerships, if you receive foreign income or have overseas investments, if you're a dual citizen with ongoing tax obligations in another country, or if you've never had a CPA with actual international tax expertise review your situation—we need to talk immediately.
Schedule a consultation with Whittmarsh Tax & Accounting, and let's perform a comprehensive review of your international tax compliance to identify problems before they result in IRS penalties and identify opportunities to reduce your overall tax burden across all countries.
You can absolutely continue with your current accountant who nods along when you mention foreign accounts but doesn't actually understand international reporting requirements. But if you're serious about proper compliance and minimizing taxes as an internationally connected taxpayer—if you want CPAs who specialize in cross-border situations—we need to have a conversation.
Book your international tax consultation here.
The United States is one of only two countries in the world (along with Eritrea) that taxes citizens on worldwide income regardless of where they live. Additionally, U.S. residents (green card holders and those meeting substantial presence tests) face taxation on worldwide income even if they're not U.S. citizens.
This creates the foundation for all international tax complexity: if you're a U.S. person living in Miami with foreign accounts, foreign income, or overseas business interests, the U.S. requires reporting and taxation of all foreign activities.
Who Is a "U.S. Person" for Tax Purposes?
What Must Be Reported?
U.S. persons must report:
The complexity comes from dozens of different forms, each with specific thresholds, deadlines, and penalty structures. Miss one form or file incorrectly, and penalties can be devastating.
At Whittmarsh Tax & Accounting, we specialize in helping Miami's internationally connected residents understand their complete U.S. reporting obligations. Our comprehensive international tax services ensure nothing falls through the cracks while optimizing your worldwide tax burden.
FBAR (Foreign Bank Account Report) represents the most common compliance failure for internationally connected taxpayers, and violations carry penalties that can literally bankrupt individuals.
FBAR Requirements:
U.S. persons with foreign financial accounts totaling more than $10,000 at any point during the year must file FinCEN Form 114 electronically by April 15th (automatic extension to October 15th).
What Accounts Must Be Reported?
Critical Threshold Detail:
The $10,000 threshold is aggregate across ALL foreign accounts. If you have five foreign accounts with $3,000 each ($15,000 total), FBAR reporting is required even though no individual account exceeds $10,000.
FBAR Penalties Are Absolutely Devastating:
Non-Willful Violations:
Willful Violations:
Real Example:
Miami resident with dual citizenship maintains accounts in home country:
IRS discovers non-compliance for 2019-2024 (6 years):
These aren't hypothetical. IRS regularly assesses six-figure FBAR penalties against taxpayers who weren't even trying to hide anything—they simply didn't know about FBAR requirements.
Who Doesn't Know About FBAR?
At Whittmarsh Tax & Accounting, we immediately identify FBAR obligations, achieve compliance for current and delinquent years through streamlined procedures when appropriate, and implement systems ensuring ongoing annual compliance.
FATCA (Foreign Account Tax Compliance Act) created additional reporting requirements on top of FBAR, with different thresholds, different forms, and separate penalty structures.
Form 8938 Requirements:
U.S. persons must file Form 8938 with their tax return if specified foreign financial assets exceed:
Unmarried individuals living in U.S.:
Married filing jointly living in U.S.:
(Thresholds are higher for taxpayers living abroad)
What Assets Must Be Reported on Form 8938?
The Overlap Problem:
Many foreign accounts must be reported on BOTH FBAR and Form 8938. The forms ask similar but not identical questions. You can't skip one because you filed the other—both are required when thresholds are met.
Form 8938 Penalties:
Why Generic CPAs Miss Form 8938:
Many CPAs don't understand FATCA reporting requirements. They might know about FBAR (the older, more famous requirement) but completely miss Form 8938. Or they see the client has foreign accounts under the threshold but don't realize the client also has foreign stocks pushing total assets over the threshold.
We see this constantly—Miami residents with clear Form 8938 obligations who've never filed it because their CPA didn't understand FATCA requirements.
At Whittmarsh Tax & Accounting, we systematically identify all foreign assets, determine whether FBAR and/or Form 8938 apply, and ensure complete compliance with both reporting regimes.
U.S. persons who own interests in foreign corporations face extraordinarily complex reporting and taxation rules under Subpart F and the Controlled Foreign Corporation (CFC) provisions.
What Is a Controlled Foreign Corporation?
A CFC is a foreign corporation where U.S. shareholders collectively own more than 50% of vote or value. However, reporting requirements apply at much lower ownership thresholds.
Form 5471 Filing Requirements:
U.S. persons must file Form 5471 if they are:
Category 1 Filer: U.S. shareholder of a Section 965 controlled foreign corporation
Category 2 Filer: U.S. officer or director of a corporation in which a U.S. person acquires stock meeting 10% threshold
Category 3 Filer: U.S. person who acquires 10%+ stock in foreign corporation
Category 4 Filer: U.S. person who had control of a foreign corporation for 30+ days during the year
Category 5 Filer: U.S. shareholder who owned 10%+ stock in CFC for 30+ days
Form 5471 Is Enormously Complex:
The form runs dozens of pages requiring:
Form 5471 Penalties:
Common Scenarios Requiring Form 5471:
The Problem:
Most internationally connected Miami residents who own foreign corporation interests have NO IDEA they're required to file Form 5471. Their foreign company might be small, might generate minimal income, might even be dormant—doesn't matter. If ownership thresholds are met, Form 5471 is required.
Generic CPAs don't ask about foreign corporations. They prepare U.S. returns assuming all income is U.S.-sourced. The client mentions "I own part of a company back home" and the CPA nods but doesn't understand this triggers Form 5471 obligations.
Years pass. IRS discovers the foreign corporation through FATCA reporting from foreign banks. Client faces $10,000+ penalties per year for failure to file Form 5471, plus potential tax on deemed distributions under Subpart F rules.
At Whittmarsh Tax & Accounting, we identify all foreign corporation interests during intake, determine Form 5471 obligations, prepare complex CFC reporting, and implement tax strategies to minimize Subpart F income and GILTI taxation.
Similar to foreign corporations, U.S. persons with interests in foreign partnerships face complex reporting requirements.
Form 8865 Filing Requirements:
U.S. persons must file Form 8865 if they:
Category 1 Filer: Control a foreign partnership (more than 50% interest)
Category 2 Filer: Own 10%+ interest and partnership is controlled by U.S. persons
Category 3 Filer: Contributed property to foreign partnership in exchange for partnership interest (if total interest exceeds 10%)
Category 4 Filer: Had certain reportable events (acquisitions, dispositions, changes in ownership)
Form 8865 Complexity:
Like Form 5471, Form 8865 requires:
Form 8865 Penalties:
Common Scenarios:
The problem is identical to foreign corporations—Miami residents don't realize their foreign partnership interests trigger U.S. reporting requirements. Generic CPAs don't identify these obligations.
Foreign trusts create some of the most complex and heavily penalized reporting requirements in the tax code.
What Is a Foreign Trust?
Generally, a trust where a U.S. court cannot exercise primary supervision AND a U.S. person doesn't control all substantial trust decisions. This includes most trusts established under foreign law.
Form 3520 Requirements:
U.S. persons must file Form 3520 if they:
Form 3520-A Requirements:
U.S. owners of foreign trusts (under grantor trust rules) must file Form 3520-A annually, which is essentially an information return prepared by the trust itself.
Foreign Trust Penalties Are Devastating:
Form 3520 Penalties:
Form 3520-A Penalties:
Common Foreign Trust Scenarios:
The Complexity:
Many U.S. persons don't even realize they're involved with "foreign trusts." They might be beneficiaries of family trusts established abroad, or they inherited interests in foreign estates being administered through trust structures, or they're receiving distributions from arrangements they don't realize constitute "trusts" for U.S. tax purposes.
Generic CPAs don't understand foreign trust rules. They see "trust distribution" from abroad and report it incorrectly (or not at all), missing Form 3520 filing requirements entirely.
At Whittmarsh Tax & Accounting, we identify foreign trust involvement, determine precise reporting obligations, properly prepare Forms 3520 and 3520-A, and structure foreign trust arrangements to minimize U.S. tax and reporting complications.
The U.S. has income tax treaties with approximately 60 countries, providing mechanisms to reduce or eliminate double taxation on certain types of income.
What Tax Treaties Cover:
Common Treaty Benefits:
1. Reduced Withholding on Investment Income:
Most treaties reduce withholding taxes on:
2. Pension Taxation:
Many treaties provide favorable treatment for pension distributions, sometimes allowing exclusive taxation by residence country or reduced rates.
3. Business Profits:
Treaties generally provide that business profits are taxable only in residence country unless business maintains "permanent establishment" in source country.
4. Real Estate Income:
Treaties typically preserve source country taxation of real estate income while providing foreign tax credit mechanisms.
Claiming Treaty Benefits:
Treaty benefits must be claimed properly through:
Why Generic CPAs Miss Treaty Benefits:
Example:
Miami resident receives UK pension distribution of £30,000.
Proper treaty application saves thousands annually for internationally connected taxpayers.
At Whittmarsh Tax & Accounting, we analyze all applicable tax treaties, identify treaty benefits available to our clients, properly claim treaty positions, and maximize foreign tax credits to minimize worldwide taxation.
The foreign tax credit (FTC) is the primary mechanism preventing double taxation for U.S. persons paying taxes to foreign countries.
How Foreign Tax Credits Work:
U.S. persons who pay income taxes to foreign countries can claim a credit against U.S. taxes for foreign taxes paid on the same income, subject to limitations.
The Credit Limitation:
Foreign tax credit is limited to:
Example:
Miami resident earns $100,000 from foreign business:
Example 2:
Miami resident earns $100,000 from foreign business:
FTC Complexity:
Foreign tax credit calculations involve:
Common FTC Mistakes:
Alternative: Foreign Earned Income Exclusion:
For U.S. citizens living abroad, the Foreign Earned Income Exclusion (Form 2555) allows excluding up to $126,500 (2024) of foreign earned income if physical presence or bona fide residence requirements are met. However, this doesn't help Miami residents—you must live abroad to qualify.
At Whittmarsh Tax & Accounting, we optimize foreign tax credit calculations, ensure proper expense allocation, maximize FTC benefits, track carryforwards, and coordinate credits with treaty provisions to minimize overall worldwide taxation.
We covered PFIC taxation extensively in the British expat article, but it's worth reiterating because PFICs affect anyone with foreign mutual funds, unit trusts, or collective investment schemes.
PFIC Definition:
A PFIC (Passive Foreign Investment Company) is a foreign corporation where:
What This Means:
Nearly all foreign mutual funds, unit trusts, investment trusts, and ETFs are PFICs. If you own investments in your home country, they're likely PFICs.
Default PFIC Taxation Is Punitive:
Without proper elections:
PFIC Elections:
QEF (Qualified Electing Fund) Election:
Mark-to-Market Election:
Strategic PFIC Planning:
For Miami residents with foreign investments:
We see countless Miami residents with foreign mutual funds who've been reporting them incorrectly for years because their CPA didn't identify the PFIC issues. This results in incorrect tax returns, excess taxation, and potential penalties for improper reporting.
Sophisticated international tax planning goes far beyond mere compliance—it involves proactive strategies minimizing worldwide taxation.
Strategy 1: Entity Selection for International Operations
Choosing the right structure for international business activities affects taxation enormously:
Strategy 2: Timing Income Recognition Across Countries
When you can control timing of income or deductions, coordinate across countries:
Strategy 3: Proper Investment Structuring
Avoid PFIC problems through:
Strategy 4: Retirement Account Coordination
Foreign pension plans create complex U.S. tax issues:
Strategy 5: Estate Planning for International Assets
U.S. estate tax applies to worldwide assets for U.S. persons:
At Whittmarsh Tax & Accounting, we develop comprehensive international tax strategies that consider all aspects of our clients' global financial lives, minimizing taxation across all jurisdictions while maintaining full compliance.
Let's quantify the actual cost of inadequate international tax planning.
Example: Miami Resident with International Connections
Profile:
Costs of Inadequate Planning:
FBAR Non-Compliance (6 years):
Form 8938 Non-Compliance (6 years):
Form 5471 Non-Filing (6 years):
PFIC Taxation Errors:
Missed Foreign Tax Credits:
Total Cost: $402,000+
This represents actual money lost through penalties and overpayment over just six years. And this doesn't include potential interest charges, additional penalties for continued non-compliance, or criminal exposure in extreme cases.
The difference between generic CPA services and specialized international tax expertise is potentially catastrophic for internationally connected taxpayers.
Do I need to report my foreign bank account if it has less than $10,000?
If your aggregate foreign accounts exceed $10,000 at any point during the year, FBAR is required for all accounts. The $10,000 threshold is aggregate, not per-account. Additionally, Form 8938 has higher thresholds ($50,000+ depending on filing status) but applies to broader asset categories. At Whittmarsh Tax & Accounting, we determine all your international reporting obligations based on your complete foreign asset picture.
What happens if I've never filed FBAR but should have?
The IRS offers Streamlined Filing Compliance Procedures allowing you to catch up with reduced penalties if you can certify your failure to file was non-willful. This provides an opportunity to achieve compliance before the IRS discovers the non-compliance. However, you must act before IRS contact—after the IRS contacts you, streamlined procedures become unavailable. We help clients achieve immediate FBAR compliance using the most favorable procedure available.
Can I just close my foreign accounts to avoid FBAR requirements?
Closing accounts doesn't eliminate filing obligations for years when accounts existed. If you had foreign accounts exceeding $10,000 in prior years, FBAR was required for those years even if accounts are now closed. Additionally, closing accounts can trigger reporting of account closures. We help clients determine whether maintaining foreign accounts makes sense or whether consolidation to U.S. accounts simplifies compliance.
Are foreign retirement accounts considered PFICs?
It depends on the specific account structure. Some foreign pension plans are PFICs, while others may qualify for treaty relief or special exemptions. This requires analysis of the specific pension arrangement under both U.S. tax law and applicable treaty provisions. Generic CPAs often miss these nuances, treating all foreign pensions identically when in fact treatment varies dramatically based on structure.
Do I need Form 5471 if I own a small percentage of a foreign corporation?
Yes, if you meet any Category 1-5 thresholds. Even 10% ownership (or less in certain circumstances) can trigger Form 5471 requirements. The foreign corporation's size is irrelevant—small family businesses and large multinational corporations face identical reporting requirements. Many Miami residents with small ownership stakes in foreign family businesses have no idea they're required to file Form 5471.
What are the deadlines for international forms?
Most international forms are due with your tax return (including extensions). FBAR has an April 15 deadline with automatic extension to October 15. Form 5471, Form 8865, Form 3520, Form 3520-A, Form 8938 all attach to your tax return. Missing deadlines triggers penalties even for inadvertent late filing. We implement systems ensuring all international forms are filed timely every year.
Can I use foreign tax credits if I don't file foreign tax returns?
You can claim foreign tax credits for foreign taxes paid whether or not you filed foreign returns. However, if you didn't file foreign returns when required, you might not have proper documentation of taxes paid. Additionally, some countries impose penalties for failure to file even when no tax is owed. We coordinate compliance in all relevant jurisdictions.
What if my foreign business partner won't provide information for Form 5471?
You're required to file Form 5471 based on available information, even if your foreign partners don't cooperate. The IRS can assess penalties for incomplete or inaccurate forms, but larger penalties apply for complete failure to file. This is one reason why international business arrangements require careful planning—partner cooperation with U.S. reporting requirements should be addressed in partnership agreements.
Are there any legitimate ways to avoid international reporting requirements?
The only way to avoid U.S. international reporting is to not be a U.S. person (citizen or resident) or to not have foreign accounts/assets. Some Americans renounce citizenship specifically to eliminate U.S. worldwide taxation and reporting requirements, but this creates enormous complications and should only be done with comprehensive planning. For the vast majority of Miami residents, proper compliance and planning is far superior to attempting to avoid obligations.
Can generic U.S. CPAs handle international tax situations?
Usually no. International tax is a specialized sub-field requiring knowledge of complex provisions most CPAs never encounter. Generic CPAs might prepare excellent returns for W-2 employees but completely miss international reporting requirements. The cost of using non-specialized CPAs for international situations is devastating—penalties for non-compliance or massive overpayment of taxes through missed optimization strategies.
You now understand the enormous complexity of U.S. international tax requirements and the devastating consequences of non-compliance or poor planning. The question is: what will you do with this knowledge?
You have two clear options:
Option 1: Continue with your current generic CPA who doesn't understand PFIC taxation, doesn't properly file FBAR or Form 8938, doesn't identify Form 5471 obligations, and is leaving you exposed to hundreds of thousands in potential penalties or excess taxation. Keep hoping nothing goes wrong.
Option 2: Schedule a consultation with Whittmarsh Tax & Accounting and get immediate comprehensive review of your international tax compliance. Identify FBAR/FATCA obligations before IRS discovers them. Properly report foreign corporations and partnerships. Optimize foreign tax credits and treaty benefits. Work with CPAs who specialize in international taxation.
The consultation is straightforward. We'll review your foreign accounts and assets, analyze your FBAR/FATCA compliance, identify any foreign entity interests, evaluate treaty benefits, review foreign tax credit calculations, and provide immediate action items for compliance and optimization.
This is not optional. If you're a Miami resident with international connections and you're not properly compliant, you're facing penalty exposure that could financially devastate you.
Book your international tax consultation immediately: https://www.whittmarsh.com/pricing-how-it-works
Our Aventura office specializes in serving internationally connected residents throughout South Florida. We understand cross-border taxation because this is our specialty—we work with globally mobile clients every day and understand the unique challenges you face.
We specifically target internationally connected Miami residents who need specialized cross-border tax expertise. Our ideal clients include:
We provide comprehensive international tax services including:
Our mission is helping Miami's internationally connected residents achieve full compliance while minimizing their worldwide tax burden through sophisticated cross-border planning.
If you're a Miami resident with international connections, we need to talk. The cost of improper international tax compliance is simply too high to risk.
Visit us online at www.whittmarsh.com
Whittmarsh Tax & Accounting serves internationally connected residents throughout Miami, Aventura, Fort Lauderdale, and all of South Florida. We specialize in FBAR filing, FATCA compliance, foreign corporation reporting, PFIC taxation, foreign tax credits, tax treaty optimization, and the complex cross-border tax issues that globally mobile individuals face living in South Florida.