New international investment options may stoke compliance issues. Many U.S. taxpayers with money in foreign bank accounts invested in cryptocurrencies over the last few years, according to Jenkins, and taxpayers often don’t know where the exchange that holds the cryptocurrency was incorporated or formed. One recent court case set the precedent that a cryptocurrency account was a foreign financial account if the exchange on which the digital currency traded was organized outside of the U.S.

Amnesty period or no, don’t let wealthy clients let this reporting slide. Holders of foreign bank, securities and cryptocurrency accounts need to e-file the FinCEN Forms 114, file amended income tax returns to report income from foreign accounts “and pay the tax,” Jenkins said. “The IRS will likely catch those filings and assess applicable penalties. Strongly encourage clients to stay compliant [or] get compliant.”

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