Can passive foreign income exclude, if money is not brought to USA?

[ftcftc]

I was on a Tax Strategy webinar call arranged by the corporate HR. To my surprise consultant/presenter clearly mentioned on 2 different occasions that we do not need to include Foreign Income in tax return as long as all of below conditions applied.

1. It is passive income (Capital Gain/ Rental/ Interest/ Dividend).

2. Tax is paid in foreign country.

3. Income is not brought (remitted) from foreign country to USA accounts.

Note: This is my interpretation from what consultant mentioned over the call and I want to validate from experts.

This was spoken during Q&A sessions and respective IRS publication wasn't provided for reference. Anyone knows if this looks, correct?  If yes, then this will expedite the tax filing as we do not get the Tax deductions data from foreign country in quick timeframe i.e. before Apir-15th.

[Mike9241]

the general rule is US citizens are taxed on their worldwide income regardless of where the funds end up.  as a matter of fact the IRS nailed some rich taxpayers a few years ago for failing to report their foreign passive income that was left in offshore banks.

get a second opinion from an independent professional. this is a public forum which is not the place to get advice on such a crucial matter. your failure to report this income if required and I think it is, could result in substantial penalties and if substantial enough possible prosecution for tax evasion.

[SDun12]

Yikes.  Sounds like either misinterpretation or really bad advice.  

Whether or not funds are remitted to the US has never played ANY role in whether or not it is reportable or taxable.  Never.  

You can take a tax credit for the taxes already paid on the income, or it could possibly be subject to a treaty provision if the income is from a country with which the US has a treaty for that type of income, but not reporting it isn't generally an option in either of these scenarios.  You either report it for a credit or you report it and assert your treaty position.