Unraveling the Mystery of Reporting Foreign Retirement Plans to the IRS
By Anthony Diosdi In an increasingly global economy, U.S. workers are experiencing unprecedented mobility. As such, U.S. citizens or residents (hereinafter U.S. persons) living in a foreign country, even for a limited time, often participate in a pension or retirement plan; participation might even be mandatory. In most cases, pretax money is contributed into retirement accounts where it accumulates tax-free until retirement. U.S. beneficiaries of foreign pension plans will likely need to report these plans on one or more information reporting forms with their U.S. tax returns. Foreign retirement accounts may also trigger unusual income tax consequences on the beneficiary of such a plan. This article will discuss the special U.S. reporting and tax consequences of foreign retirement plans. FBAR - Duty to Report Foreign Financial AccountsIn 1970, Congress enacted…