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Archive for FBAR

Foreign Account Disclosures Soar To Over 1 Million

The IRS published a News Release on March 15, 2016 entitled, Foreign Account Filings Top 1 Million; Taxpayers Need to Know Their Filing Requirements that readers of this blog might find interesting.

Below are some snippets:

WASHINGTON — Strong and sustained growth of taxpayers Read more

Cheap Shelf Or Top Shelf?

Many people make purchase decisions based on cost, and little else. “Motor oil is motor oil,” they insist. In the minds of many, it is pure folly to pay X dollars per month for auto insurance when another company provides the same service for a mere Y dollars. Or, they ask rhetorically, what moron would pay X dollars per gallon for gasoline when the station a quarter-mile down the road only charges Y dollars?

But, as the corporate shills at Valvoline were quick to remind Earl, cost is only one element in a purchase decision. As many of us Read more

FBARs for Unsuspecting Canadians Present in the United States

FINCEN114 due June 30th for the 2015 taxation year, reporting beneficial interest or signature authority in non-U.S. financial accounts where the annual aggregate highest balance is greater than $10K U.S., may have to be filed by Canadian taxpayers.

Those who meet the substantial presence test for residency in the U.S., regardless of a claim under Article IV of the Canada/U.S. tax Read more

FATCA 2015 Roundup: It’s All Serious Business!

TaxConnections Member Manasa Nadig

A lot has been written about the Foreign Account Tax Compliance Act {FATCA} in the past year. As this year comes to a close and I write up this post, I wanted to give you all, my dear readers a synopsis at your finger-tips, a round-up, if you will of some major FATCA events for 2015:

1. FBAR Deadlines Changed:

On July 31, 2015 President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 into law, which modified the due date of several key forms for Americans with foreign income and Americans living abroad. That includes the Report of Foreign Bank and Financial Accounts, or Form 114, colloquially known as the FBAR.

Any U.S. person with a financial interest in, or signatory authority over, foreign financial accounts must file the FBAR, if at any time, the aggregate value of their relevant foreign account or accounts exceeds $10,000. An account over Read more

Your Field Guide To Foreign Account Disclosure Programs – Which Is Your Pick?

There is a lot of buzz going around these days about FBARs, foreign accounts, foreign corporations, IGAs, tax treaties, more & more Swiss banks on the roll-call list, you name it and they cry “FATCA”! Confusion all-around, fear mongers are having a field day, may be rightfully so, fines are high and penalties higher. People are ready to hit the panic button. Or so one would think!

To quote my favorite Buddhist teacher, Thich Nhat Hanh here, “People have a hard time letting go of their suffering. Out of a fear of the unknown, they prefer suffering that is familiar.”

If you are wondering what a Thich Nhat Hanh quote is doing on a tax blog but you have one hand hovering over the panic button, just think about it…without going into many of Buddhism’s wonderful practices let me assure you, do decide to end your suffering, however first- DON’T PANIC! Second, hire yourself a good Enrolled Agent who Read more

It’s All In The Name

Some events are so seminal that they need no explanation. When someone says “Holocaust” or “9/11” or “Hindenburg,” no further explanation is needed. Some sports stars share similar fame. There is only one Michael, one LeBron, and one Wilt. While he admittedly does not rise to that level – some scouts shake their heads and say his left-handed layup needs work – James Moore’s rather commonplace name may someday reach that upper echelon.

Part I

A few months ago, I posted on the curious case of Moore v. United States. That article has an exhaustive discussion of the facts and also of FBAR. In a nutshell, Mr. Moore did not file an FBAR for 2003-2008; he filed late in 2009. The IRS conducted an investigation and sent Mr. Moore a memo in 2011 which curtly informed him that, after due Read more

Tax Delinquents May Have Passports Cancelled – Take 2!

We previously posted on Thursday, May 31, 2012 Tax Delinquents May Have Passports Canceled & Be Questioned at Air & Sea Ports  where we discussed that almost unnoticed, Congress is close to approving a law under which the Internal Revenue Service (IRS) will be able to revoke the passports of Americans who owe substantial unpaid taxes. Nothing has happened until now.

A GAO report found that for the 2008 tax year, the State Department issued passports to more than 224,000 citizens who owed about $6 billion in tax. Most of it was for individual income taxes, and nearly two-thirds was more than three years old.  The biggest Tax Debtor owed $46.6 million and was part-owner of a professional sports team. Another owed nearly $40 million and had traveled to 10 foreign countries in the recent past. The report said that the IRS had filed tax liens against both individuals but large amounts of tax Read more

Part 11 – Understanding “Exit Taxes”

S. 2801 of the Internal Revenue Code is NOT a S. 877A “Exit Tax”, but a punishment for the “sins of the father”

Updated September 12, 2015 – the IRS has issued “proposed rules”  governing the issue of “The sins of the father”.

The following was a comment on Part 9 of this “Exit Tax” series.

“I know many tax compliant, patriotic Americans who have renounced. Many have done so seeing the $2m threshold approaching, to protect their families and get on with their lives. All with heavy hearts.

You did not mention the additional burden on those who renounce who have US citizen relatives–the tax their Read more

Story of A Good Citizen Who Reports Foreign Bank Accounts But Forgets FBARs! Huh?

I have to say today’s blog post was triggered by a phone call a few weeks ago. The would-be client wanted to report his foreign bank accounts. Apparently, this good citizen had all his I’s dotted & T’s crossed – so to speak – so what was the problem you ask? I hate to say this, but it happens more than you would think. He did not know there were additional reporting requirements involved when it came to bank accounts in foreign financial institutions. (More on FBAR thresholds in my post here)

You have to know that the IRS will not impose a penalty for the failure to file the delinquent FBARs if you “properly” reported the foreign bank accounts on your US tax returns, and paid tax on the income from these accounts and have not been contacted by the IRS for an income tax examination or a request for the delinquent returns has not been made by them. Read more

Part 10 – Understanding “Exit Taxes”

The S. 877A “Exit Tax” and possible treaty relief under the Canada US Tax Treaty

Introduction – The Canada U.S. Tax Treaty Does Not Always Prevent Double Taxation

See: Part 9 – Understanding “Exit Taxes” – For #Americansabroad: US “citizenship taxation” is “death by a thousand cuts”, but the S. 877A Exit Tax is “death by the guillotine”.

When countries independently make major changes in tax law, double taxation can occur.

The following comment from 5thSwiss on the Isaac Brock Society site explains why and how double taxation can be a reality. It also underscores the dangers of a U.S. citizen leaving the United States. Read more

FBAR Due Dates Align With Tax Returns

The SURFACE TRANSPORTATION ACT OF 2015 became law in late July, 2015. The tax provisions changed a number of due dates effective for tax years beginning after December 31, 2015 for partnerships, C corporations and S corporations. Surprisingly, was a change for FBARS or FINCEN114 that will now align commencing for the 2016 taxation year the FBAR (Report of Foreign Bank and Financial Accounts) due date with the due date for individual returns, moving it from June 30 to April 15. The bill instructs the IRS to modify existing regulations to reflect the changes to tax return filing deadlines.

This will mean that for 2016 tax return filers the FBAR will be due April 15, 2017 which is the normal due date for U.S. persons residing in the U.S. on April 15th. It appears that alignment will also mean that the automatic extension to June 15 for those residing outside of the U.S. will be accepted as not late, but more importantly, it Read more

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