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. Sales of US real property by foreign persons (or by US persons receiving proceeds from foreign buyers) trigger FIRPTA withholding requirements and sometimes Form 3520 foreign gift issues.
• 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

FBAR — the Report of Foreign Bank and Financial Accounts (FinCEN Form 114) — is one of the most important and most violated reporting requirements for Miami residents. If you have a foreign bank account (or multiple accounts) with a combined value exceeding $10,000 at any point during the calendar year, you are required to file an FBAR annually with FinCEN.

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: Non-willful FBAR violations carry a civil penalty of up to Non-willful FBAR violations carry a civil penalty of up to 0,000 (adjusted annually for inflation) per annual report, not per account. Willful violations: the greater of $100,000 or 50% of the account balance per violation. Criminal prosecution is possible for willful violators.

Form 3520 — Foreign Gifts and Trusts

Miami residents with family in Latin America or elsewhere frequently receive money from abroad — whether as gifts, loans, inheritances, or trust distributions. When these transfers come from foreign persons (non-US citizens or entities), they trigger Form 3520 reporting obligations:

• 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
• Any amount received from a foreign trust requires Form 3520 (there is no threshold)
• A transfer to a foreign trust also triggers reporting requirements

The IRS treats Form 3520 violations with the same severity as FBAR penalties — the base penalty is $10,000 per form, with escalating penalties for larger transactions. 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

If you have unreported foreign accounts, unfiled FBARs, or Form 3520 violations — and the IRS hasn’t contacted you yet — voluntary disclosure is your best path forward. There are two primary IRS programs available:

• IRS Voluntary Disclosure Program (VDP): For taxpayers with willful violations. You proactively come forward with full disclosure in exchange for structured penalty treatment and the elimination of criminal prosecution risk. Requires full disclosure of all unreported income and accounts for the 6-year disclosure period.
• Streamlined Filing Compliance Procedures: For taxpayers whose non-compliance was non-willful (inadvertent). US residents pay a 5% miscellaneous offshore penalty on the highest year’s foreign asset value; US persons living abroad (for at least 330 days in one of the last 3 years) pay no penalty under Streamlined Foreign Offshore Procedures.

The window to use streamlined procedures closes the moment the IRS contacts you. Learn more about IRS voluntary disclosure programs here.

IRS Tax Debt and Collections in Miami

Separate from international issues, Miami taxpayers with IRS tax debt face the same collection machinery as any US taxpayer — just without the benefit of a state income tax to give the IRS additional leverage (since Florida has no state income tax, the IRS can’t use FTB-style state tax debt cross-enforcement).

Common IRS collection actions in Miami include:

• Federal tax liens filed in Miami-Dade County public records (blocking real estate transactions and refinancing)
• 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 (over $62,000 in 2024) — 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?

If the transfer exceeds $100,000 in a calendar year and the sender is a foreign person (non-US citizen or entity), yes — Form 3520 must be filed with your tax return for that year. Below $100,000 from an individual (or $16,649 in 2024 from a US person), no reporting is typically required. The threshold is per-person per-year — multiple smaller gifts from the same foreign source may be aggregated.

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

Contact a tax attorney before doing anything else. Do not simply file late FBARs without a strategy — depending on the facts, you may need to use the IRS Streamlined Filing procedures or Voluntary Disclosure Program to avoid willfulness-based penalties. The strategy matters enormously here. What you say and how you present the situation to the IRS can be the difference between a $10,000 penalty and a 50%-of-balance penalty.

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

No — federal IRS obligations apply to all US taxpayers regardless of state of residence. Florida’s no-income-tax status means you don’t owe the state anything on ordinary income, but the IRS’s federal audit and collection powers are unaffected. Florida taxpayers still owe federal income tax, self-employment tax, payroll tax, and all international reporting obligations.

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 (over $62,000 in 2024) 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. Entering into an installment agreement or OIC removes you from the certification list. Learn more about IRS passport restrictions here.