What Triggers IRS Audits on Offshore Bank Accounts in Florida and How Taxpayers Can Protect Themselves

Offshore bank accounts are perfectly legal. However, they can also raise red flags with the IRS, especially when not adequately disclosed. In recent years, the IRS has significantly increased enforcement around foreign assets and international income, and Florida taxpayers are often caught off guard when audit letters arrive.

You may be subject to strict reporting requirements if you opened a foreign bank account for privacy, family reasons, or investment opportunities. Our experienced Florida tax-IRS attorney explains how failing to comply, even unintentionally, can result in steep penalties and increased audit risk.

What Triggers IRS Attention to Offshore Accounts in Florida

The IRS uses multiple programs and global data-sharing agreements to identify taxpayers who hold foreign accounts. In dealing with offshore financial accounts, common audit triggers for Florida residents include:

• Failure to file the FBAR (Report of Foreign Bank and Financial Accounts) for accounts over $10,000.
• Omitting foreign income earned through interest, dividends, or investments.
• Not filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with your tax return.
• Transfers involving high-risk jurisdictions flagged by the U.S. Treasury.
• Receiving foreign inheritance or gifts not properly reported.

Florida has a significant number of foreign-born residents and international business owners, which increases scrutiny in coastal cities like Miami, Tampa, and Orlando. If the IRS suspects willful noncompliance, it may impose civil penalties that exceed the value of the account or even pursue criminal charges in extreme cases.

What to Do if You Are Facing an Offshore Account Audit In Florida

If you receive an IRS letter about foreign assets, don’t ignore it. The agency may already have account information through international agreements like FATCA (Foreign Account Tax Compliance Act), which allows them to obtain data directly from foreign banks. Here’s what to do to protect yourself, your rights, and your financial security:

• Review all past tax returns and FBAR filings for accuracy.
• Gather documentation for all foreign accounts, including balances and ownership details.
• Consult an experienced Florida IRS/tax attorney to assess whether your failure to report was willful or unintentional.
• Consider voluntary disclosure programs, if applicable.
• Avoid amending returns without legal guidance, as this may increase liability.

Florida taxpayers may also need to disclose foreign trusts, partnerships, or business interests. The sooner you address an audit or reporting failure, the more options you may have to reduce penalties or resolve the matter out of court.

Contact Our Experienced Florida Tax Attorney and Request a Consultation Today

IRS audits involving offshore accounts can be complex and intimidating. With so much at stake, including civil penalties and potential criminal exposure, get the experienced legal representation you need to protect your rights and reach a favorable resolution.

As a licensed attorney, Certified Public Accountant, and former FBI Special Agent, Ronald Cutler has over 50 years worth of experience helping clients in complex tax cases. To protect offshore accounts and prevent potential audits and the consequences, contact our office today and request a consultation with our experienced Florida IRS/tax attorney.

Sources:

irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

irs.gov/pub/irs-pdf/f8938.pdf

irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca