Under federal tax law, an American citizen must file annual reports with the IRS that disclose foreign income. In a recent example, an 83-year-old Florida man was convicted of filing false returns over a 25-year period, from 1987 through 2012.
Specifically, the man failed to report the money he held in accounts in Switzerland and Israel. Although even a tax lawyer would agree that federal income tax forms might become complicated, the omission in this case appeared intentional. For example, the man used a code phrase in communications with those international bankers. In addition, his withdrawals were always under $10,000, which is the threshold when banks must report a transaction to federal regulators.