The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) recently announced plans to propose a new disclosure requirement for U.S. taxpayers with offshore cryptocurrency accounts. If the proposal moves forward, all taxpayers who own more than $10,000 in cryptocurrency held in offshore accounts would be required to file FinCEN Form 114, Report Foreign Bank and Financial Accounts (FBAR) on an annual basis.

If you own offshore assets, you may need to file more than your state and federal income tax returns on April 15. You may have an obligation to disclose your offshore assets to the Internal Revenue Service (IRS), the Financial Crimes Enforcement Network (FinCEN), or both; and, if you do, you will need to file the requisite forms to avoid exposure to substantial penalties. Here, Virginia international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains the offshore asset disclosure requirements for 2021.