The federal income tax is levied on the worldwide income of U.S. citizens and resident aliens and on certain U.S. income of non-residents. Once the income was taxed, it is not conflicted against the Foreign Exchange Control Law, thus, the funds can be freely transferred between countries in general.
However, you must report to I.R.S. in the following cases:
1. Transfer exceeding $100,000 from Non-Residents.
U.S. citizens and resident aliens with more than $100,000 gift/transfer from out of country during a calendar year are required to report the nature of transfer on Part IV on I.R.S Form 3520 and file it by the income tax due date on the following year, including extension. Penalty is imposed for non-filing at a range from 5% to 25% of transfer/gift received.
Please consult with professionals before making any transfer for U.S. tax law on gift is most likely different from the gift tax law of transferors.
2. Foreign Bank Accounts with Balance exceeding $10,000
Each U.S. person having a financial interest in, or signature or other authority over, any foreign financial accounts with an aggregate value exceeding $10,000 at any time during the calendar year must report such relationship by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (“FBAR”), in addition to noting that they have such foreign account filing requirement on Schedule B of Form 1040 and including the income from these accounts on the United States person’s U.S. federal income tax return. The Form TD F 90-22.1 was recently revised in October 2008. The revised form provides additional definitions and clarifications. It also generally expands the class of individuals and companies required to make annual reports, including certain foreign persons in and doing business in the United States (including a branch of a foreign entity) and certain trusts with U.S. settlers. There are also more detailed rules regarding consolidated reports for corporate parents and subsidiary corporations. The revised form confirms that there is no extension of time for filing the form.
A willful violation of the Form TD F 90.22-1 requirements (i.e., failure to file Form TD F 90.22-1, failure to supply information on the report, or filing a false or fraudulent report) could result in the imposition of civil penalty of not more than $25,000 and/or possible criminal pe