What are the IRS reporting requirements for an offshore account?

Most major countries impose taxes on the worldwide income of their permanent residents. Thus, you must report earnings from an offshore bank, securities or other financial account as you would any other income on your tax return.

Some countries additionally require you to report the existence of offshore accounts; notably, the United States and Canada.

USA. US citizens living anywhere in the world and all other permanent residents of the United States are required to acknowledge their signature or other authority over foreign bank, securities or other financial accounts on Schedule B of Form 1040. Such authority must also be acknowledged in a separate filing of Treasury Form TD F 90-22.1. Persons with an account or accounts with an aggregate valued larger than US$10,000 need these disclosures.

Canada. Canadian permanent residents with foreign holdings with a value higher than C$100,000 are required to complete Revenue Canada's "Foreign Income Verification Statement." It requires classification of foreign investments into six categories: (1) funds held outside Canada; (2) shares of non-resident corporations; (3) indebtedness owed by non-residents; (4) interests in non-resident trusts; (5) real property outside Canada; and (6) other property outside Canada. Residents must also list the total income reported on their tax return in the year from these assets.