IRS reaches Costa Rica

The U.S. Internal Revenue Service announced last week a new initiative to crack down on citizens who are hiding money offshore.

The crackdown extends to those U.S. citizens who have control of overseas corporations, what the IRS calls an entity. Many expats in Costa Rica fall into that category if the total amount in bank accounts is $10,000 or more at any time in the year.

U.S. citizens face complex tax requirements overseas. For example a citizen has to file a report with the IRS if they transfer personal property, like a home, into a foreign corporation.

Nevertheless, the IRS is less than aggressive in trying to inform or help U.S. citizens. The U.S. Embassy in San José does not have a full-time IRS agent in residence.