The United States is one of only two countries in the world (the other is Eritrea) that taxes its citizens on worldwide income, regardless of where they live. If you're an American living in Israel, or an American with Israeli assets, you owe full US tax compliance — even if you've never set foot in the US in years.
This creates a unique challenge: you must report income, assets, and transactions in two completely different tax systems, each with different rules, definitions, and forms. A mistake on either side can result in penalties of $10,000 to $500,000+ per violation, plus criminal exposure in extreme cases.
This is where we come in. Our firm specializes in the Israeli side of dual-jurisdiction compliance, working in lockstep with US-licensed CPAs to ensure nothing falls between the cracks.
FBAR is the most common US filing for Americans in Israel — and the most commonly missed.
| Type | Penalty |
|---|---|
| Non-willful failure to file | Up to $10,000 per violation per year |
| Willful failure to file | Greater of $100,000 or 50% of account balance |
| Criminal (extreme cases) | Up to $500,000 + 10 years imprisonment |
The penalties stack year after year. Many US persons in Israel discover they've been non-compliant for 5-10 years, facing potentially crushing penalties. Our Streamlined Filing service (below) is the path back to compliance.
While FBAR is filed with the Treasury Department, FATCA's Form 8938 is filed with the IRS as part of your tax return. Both report foreign assets, but with different rules.
| Filing Status | Living in US | Living Abroad |
|---|---|---|
| Single | $50,000 (year-end) or $75,000 (any time) | $200,000 / $300,000 |
| Married Joint | $100,000 / $150,000 | $400,000 / $600,000 |
| Married Separate | $50,000 / $75,000 | $200,000 / $300,000 |
FATCA covers a broader range of assets than FBAR — including direct ownership of foreign stock, partnership interests, trusts, retirement accounts, and more. It does NOT cover:
GILTI (Global Intangible Low-Taxed Income) was introduced by the 2017 Tax Cuts and Jobs Act and has been one of the most disruptive provisions for Americans with Israeli companies.
If you own more than 10% of an Israeli company (a "Controlled Foreign Corporation" or CFC), the IRS requires you to include most of the company's annual earnings in your US taxable income — even if you never receive a dividend. The Israeli company's earnings flow through to your personal US 1040 each year.
Without the right structure, GILTI can effectively double your tax bill. With it, you can reduce or eliminate the US side entirely.
Form 5471 is the IRS information return for US persons who own (or have controlling interest in) foreign corporations. It's extraordinarily complex — even the IRS estimates 60-90 hours per filing.
Categories of filers:
Each category has different schedules and disclosures. Penalty for non-filing: $10,000 per form per year, plus a 10% reduction in foreign tax credits.
If there's one tax issue that catches Americans in Israel by surprise, it's PFIC.
A Passive Foreign Investment Company (PFIC) is any foreign corporation where 75%+ of income is passive, or 50%+ of assets are passive. Most Israeli mutual funds, ETFs, and even some pension products are PFICs.
We help you:
Many of our clients come to us because they only just learned about FBAR/FATCA, sometimes after years or decades in Israel. Don't panic — the IRS has a path back.
The Streamlined Foreign Offshore Procedures allow non-willful late filers to:
This program has helped thousands of Americans in Israel come back into compliance with minimal financial pain. We've handled dozens of these cases.
30-min Zoom call to map your situation. Israeli accounts, US filings status, structure, exposure. No charge.
Clear scope, fixed-fee engagement letter, secure document portal. Power of Attorney for Israeli authorities (Yipui Koach).
We handle Israeli filings & data prep. Coordinate with your US CPA (or a partner firm). All forms reviewed twice.
Annual filing reminders, proactive planning calls, monitoring of tax law changes. We're your Israeli CPA for life.