Automation has made it possible for the US Treasury Department to correlate data and look for possible unreported taxable income.

One gap in the information available to the US Treasury Department has been direct reporting from foreign financial institutions on the accounts of US residents and citizens.

In 2014, foreign financial institutions, including Saudi banks, will be required by the US government under the Foreign Account Tax Compliance Act (FATCA) to report to the US Internal Revenue Service (IRS) information regarding the accounts of US taxpayers and the accounts of foreign entities in which US taxpayers hold a substantial ownership interest.

Saudi banks may be forced to withhold and pay directly to the IRS, funds that the IRS asserts that it is owed, taking these monies directly from the accounts of individuals and corporations under their stewardship. Saudi banks may face substantial penalties if they fail to comply with these new rules.

American citizens living in Saudi Arabia have only until September 9 to file Foreign Bank Account and Financial Records (FBAR) forms dating back to 2003.

The Treasury Department FBAR form TD F 90-22.1 can be found online.

This form is supposed to be filed by June 30 each year to report assets in foreign financial accounts that in the aggregate are over $10,000.

The FBAR, filed with the Treasury Department, is in addition to the US 1040 income tax return, which is filed with the IRS.

The penalty for non-willful filing is $10,000.

Willful non-filing may result in a fine of not more than $500,000 and imprisonment of not more than five years.

People with permanent residency status in the US face a risk of non-renewal or revocation of their residency if they failed to file an FBAR.

People living in Saudi Arabia, who are liable for US taxes and who have not been filing the 1040 income tax return, can still take advantage of the IRS’s voluntary disclosure program.

It is possible to enroll in the program before September 9 and request a 90-day extension in order to file back tax forms.

According to IRS regulations, individuals with dual nationality — US plus any other nation — must file both FBAR and 1040 income tax forms, even if all their income comes from sources abroad, such as an employer in Saudi Arabia.

All details can be found by searching “2011 Offshore Voluntary Disclosure Initiative (OVID)” at www.irs.gov.