Money from Brazil to US

[rb1754]

Hope someone might be able to answer this.

My Father who is American recently retired, but he spent 20 years working abroad in Brazil. Over his career he saved up a lot of money in Brazilian currency, purchased a Brazilian apartment, and stored the rest of the money in a foundation at a Brazilian bank. However, now as he gets older, our family is seriously considering transferring all of his earnings from Brazil to the United States - It translates to roughly 7 figures in USD.

My Father has refused to do this year after year because he claims the United States will strip him of 35% of his earnings. I don't know if he believes this because technically it will be looked at as taxable income? I also don't know if he's technically broken United States law by not bringing the money back into America. As I said before, he has the money in a foundation, because he's unable to open a bank account in Brazil as he is not a Brazilian citizen.

I suppose my question has a few parts to it: - What is the best way for him to bring the money into the United States and will he in fact lose 35% of it or more upon doing so? - I heard if he bought property in the United States with the money that he would be able to keep it - is there any truth to that?

On a side note, unlike my Father, I am a dual citizen of the United States/Brazil and I would like to help him if I can, but I do not want to get involved if it sounds like he broke the law in some capacity.

 

[STEPHAN]

Did he report his Brazilian account to the IRS?

 

[rb1754]

No, he did not. He was living abroad for over 20 years and taxed by the Brazilian government I believe. What will happen if he tries to import the money to the United States at this point?

 

[davew128]

Same thing that could happen if he doesn't: IRS takes 50% of the highest balance each and every year for willful failure to report the foreign account.

That's just the penalty for failure to report the account, even if he isn't an owner, but because he has signing authority. Any income thats his would be taxed as well. Am I right in suspecting he didn't report the income he earned there as well from work?

 

[STEPHAN]

Dave if he earned the money while out of the country for years, did he at that time still have to files taxes in the US?

 

[I'mTheFather]

Easy to find....

http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad

https://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/

 

[rb1754]

From what I know he must have paid taxes abroad at some point because otherwise he wouldn't have any money at all but it probably warrants a conversation about it. If the answer is he did not report all of the income then upon bringing it in what are the odds he will in fact owe the IRS more in penalties than what he even has stashed away? I do not want to turn a bad situation into a worse one by having him be indebted to the US government. Would he in all likelihood also be threatened with jail time since it may be considered tax fraud?

 

[davew128]

Dave if he earned the money while out of the country for years, did he at that time still have to files taxes in the US?

Yes. He is a US citizen.

 

[davew128]

From what I know he must have paid taxes abroad at some point because otherwise he wouldn't have any money at all but it probably warrants a conversation about it. If the answer is he did not report all of the income then upon bringing it in what are the odds he will in fact owe the IRS more in penalties than what he even has stashed away? I do not want to turn a bad situation into a worse one by having him be indebted to the US government. Would he in all likelihood also be threatened with jail time since it may be considered tax fraud?

This is the point where he actually hires an attorney to evaluate the situation.

 

[LdiJ]

This is the point where he actually hires an attorney to evaluate the situation.

He will want to hire someone who is familiar with the amnesty program. If he comes forth voluntarily, under that program, it will reduce his penalties dramatically.

 

[I'mTheFather]

This thread clarifies his reason for the other thread. I'll add that having your father on your own US bank account is a problem.

https://forum.freeadvice.com/hiring-firing-wrongful-termination-5/non-compete-form-613342.html#post3325953

 

[davew128]

He will want to hire someone who is familiar with the amnesty program. If he comes forth voluntarily, under that program, it will reduce his penalties dramatically.

More than that, if he's residing outside the US Of course the willful failure to report the income is a problem...