Miami IRS Tax Attorney: International Tax, FBAR, and Federal Tax Debt in South Florida

Miami is one of the most internationally connected cities in the United States. Its location as a gateway to Latin America, the Caribbean, and Europe has created a uniquely complex tax environment — one where FBAR violations, unreported foreign accounts, international trust issues, and foreign gift reporting problems are not the exception but the rule.

Segal, Cohen & Landis, P.C. (SCL) has deep experience in international tax compliance and IRS enforcement — representing Miami-area clients (and clients throughout the US) with foreign financial account issues, FBAR penalties, Form 3520 violations, IRS audits, and tax debt resolution. This guide explains the top IRS issues for Miami taxpayers and what you can do about them.

Why Miami Has Elevated IRS Exposure

Miami’s tax risk profile is unlike nearly any other American city:

• Latin American and Caribbean financial connections: A large portion of Miami residents maintain financial accounts in Venezuela, Colombia, Brazil, Argentina, Mexico, and throughout the Caribbean. These accounts — whether held personally or through local family business structures — carry FBAR reporting obligations that many Miami taxpayers don’t know about.
• Real estate transactions with international capital: Miami’s luxury real estate market is significantly fueled by foreign capital. Disposition of U.S. real property interests by foreign sellers generally triggers FIRPTA withholding, subject to exceptions. A foreign buyer does not by itself make a U.S. seller subject to FIRPTA withholding. A purchase payment is distinct from a foreign gift.
• No Florida state income tax — but federal exposure remains: Florida’s absence of a state income tax is often misunderstood as meaning “less tax risk.” Federal exposure — IRS audits, FBAR, FATCA, tax debt — is entirely separate from state tax and remains fully in effect for all Florida residents.
• High proportion of self-employed and cash-intensive businesses: Miami’s hospitality, tourism, entertainment, and services sectors generate high volumes of cash income — a historic audit trigger for IRS examiners.

FBAR and Foreign Account Issues for Miami Taxpayers

A U.S. person generally must file an FBAR if they have a financial interest in or signature or other authority over foreign financial accounts whose aggregate value exceeds $10,000 at any time during the calendar year, unless an exception applies.

For Miami’s international community, common FBAR scenarios include:

• Accounts in Colombia, Venezuela, Brazil, or other Latin American countries held for family, business, or investment purposes
• Accounts in offshore banking jurisdictions (the Cayman Islands, Bahamas, Panama, Switzerland) used for asset protection or tax planning
• Joint accounts with a foreign spouse or family member where the US person has signatory authority
• Foreign brokerage accounts holding stocks, bonds, or other financial instruments
• Foreign retirement or pension accounts (these may also require FATCA Form 8938 reporting)

Penalties are significant: Nonwillful FBAR penalties are measured per report, not per account, under Bittner. Statutory dollar maximums are inflation-adjusted. Willful violations follow different penalty rules. Criminal prosecution is possible for willful violators.

Form 3520 — Foreign Gifts and Trusts

U.S. persons may need Form 3520 for specified foreign-trust transactions or ownership and qualifying large gifts or bequests. Donor residency, transaction type, thresholds and exceptions determine the requirement.

• A gift from a foreign individual exceeding $100,000 in a calendar year requires Form 3520 filing
• A bequest or inheritance from a foreign estate exceeding $100,000 requires Form 3520 filing
• A U.S. person generally reports foreign-trust distributions, specified loans or use of trust property, ownership and reportable transfers under the Form 3520 instructions; exceptions apply.
• A transfer to a foreign trust also triggers reporting requirements

Foreign-gift penalties generally accrue at 5% per month up to 25%, subject to a reasonable-cause exception. Foreign-trust reporting has separate penalties, generally starting at the greater of $10,000 or the applicable percentage. A transfer labeled as a “loan” from a foreign family member will not avoid Form 3520 reporting if the IRS determines it was a gift — the substance of the transaction controls, not its label.

IRS Voluntary Disclosure for Miami Taxpayers

Before filing, evaluate the applicable compliance options. VDP concerns eligible willful conduct and generally a six-year disclosure period; streamlined and other delinquent-filing options have different requirements. No program guarantees immunity.

• IRS Voluntary Disclosure Program (VDP): For taxpayers with willful violations. You proactively come forward with full disclosure in exchange for structured penalty treatment and no guarantee of immunity from criminal prosecution. Requires full disclosure of all unreported income and accounts for the 6-year disclosure period.
• Streamlined Filing Compliance Procedures: Eligible nonwillful taxpayers using domestic procedures generally pay 5% of the highest aggregate year-end balance or value of assets included in the program penalty base. Foreign procedures require the applicable nonresidency test and other eligibility conditions: citizens or green-card holders must have no U.S. abode and be outside the United States for at least 330 full days in one eligible year; other individuals use the substantial-presence test. Review joint-filer requirements and the covered return and FBAR periods.

A taxpayer under an IRS civil examination for any year is ineligible for streamlined procedures, even if the examination does not relate to undisclosed foreign assets; criminal investigations also disqualify. Any contact requires case-specific eligibility review. Learn more about IRS voluntary disclosure programs here.

IRS Tax Debt and Collections in Miami

Florida does not impose an individual income tax, but federal collection powers remain. Separate Florida taxes may apply to businesses and transactions.

Common IRS collection actions in Miami include:

• Federal tax liens potentially affecting real estate transactions and refinancing; discharge or subordination may be available
• Bank levies on accounts at Miami-area banks, credit unions, and investment firms
• Wage garnishment taking a large portion of earned income from Miami employers
• Passport denial or revocation under the FAST Act for taxpayers with “seriously delinquent” tax debt (more than $66,000 in 2026) — particularly impactful for Miami’s internationally mobile business community

See our Miami IRS tax attorney page for information on how we serve South Florida clients.

Frequently Asked Questions — Miami IRS Tax Attorney

I received money from my family in Colombia — do I need to report it?

For a U.S. recipient, gifts and bequests exceeding $100,000 from a nonresident alien individual or foreign estate generally require Form 3520; related-party aggregation applies. Gifts from foreign corporations or partnerships have a different inflation-adjusted threshold. U.S. citizenship alone does not define every donor’s tax status. File Form 3520 separately from the income-tax return.

My bank account is in Venezuela and I never filed an FBAR — what should I do?

Penalty exposure depends on the facts, willfulness, reasonable cause and applicable inflation-adjusted limits. Nonwillful penalties are assessed per report under Bittner; willful violations follow different rules. Obtain advice on accurate disclosure and applicable procedures.

Does Florida having no state income tax reduce my IRS exposure?

Florida has no individual income tax. Federal income, self-employment, payroll and international reporting requirements apply when the taxpayer meets the relevant rules; Florida corporate and other taxes may also apply.

What is the IRS passport restriction rule and how does it affect Miami residents?

Under the FAST Act, the IRS can certify “seriously delinquent” tax debt (more than $66,000 in 2026) to the State Department, which can then deny passport applications or revoke existing passports. For Miami’s internationally mobile business community — many of whom frequently travel to Latin America, Europe, and beyond — this is a significant practical consequence of unresolved IRS debt. Timely payment under an IRS-approved installment agreement or accepted OIC is excluded from seriously delinquent tax debt; filing an application alone does not establish that exclusion. Learn more about IRS passport restrictions here.