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US. Not much more to it than that.
@CanuckDoc, thank you for your post (Feb 14), am very interested in the issue you mentioned, re “signing authority with no interest: part and my job as treasurer of a small local non-profit organization.”
Was looking into this myself for future work reasons, and also for volunteering (hence my previous posts). My past experiences are that with limited staff and small boards in community not-for-profits, co-signing powers – even just as backups for others is very important. If we can’t work or volunteer in non-profits without getting further entangled in the FBAR/FATCA mess – and their account totals count toward our threshold for reporting, and for calculating possible penalties – it is a burden for us to have the co-signatory role – a burden that US resident ‘persons’ don’t face….a barrier to some categories of employment, to getting experience/training through volunteer roles, or participating fully in our professional communities…Can’t even sign on a tiny ‘foreign’ petty cash account without an FBAR? Don’t want to have to explain to a potential employer or my community group, why I can’t/won’t be a co-signatory….
Funny though – thought barriers to employment would mean barriers to earning taxable wages – and barriers to generating US taxes … Oh, I forgot – it’s the FBAR/FATCA PENALTIES that have such lovely potential for revenues extracted (extorted) from US ‘taxpayer’ ‘persons’ abroad – not the usual modest salaries in the not-for-profit sector (unless the most current proposal to eliminate the foreign earned income exclusion is successful…). Basically, the more unrelated accounts and assets the IRS and Congress tie into the “highest aggregate sum” reporting basket, the more people will meet the threshold – even if they themselves don’t have anything much to save in ‘reportable’ accounts.
@CanuckDoc, sorry, that was re your post of February 21, 2012 at 9:34 am.
Here is an interesting Hodgen post about rumours of continued backlog of “millions” of documents to be processed. Maybe time to slip in a quiet disclosure? (this is not legal advice, I am not your lawyer etc). http://hodgen.com/fbars-and-delays-in-detroit/
@ Jeff Or not. I consider the FBAR a substantial hazard under the Fifth Amendment, and hence, I will never file one, ever. But certainly, with millions of FBARs to process it would seem possible to slip a go forward or quiet disclosure into the mix.
http://isaacbrocksociety.com/2012/02/09/fifth-amendment-belated-fbar-filings-are-a-substantial-hazard/
@Jefferson D. Tomas: Thanks for that info. about the IRS backlog. I have done 3 years of returns and FBAR (for a small RRSP) but have not sent them yet. A tax accountant that I had one consultation with recommended that because of my low income, I should be able to get away with filing for only 3 years. The main reason for filing for only 2009-2011 is that I was self-employed prior to those years. The accountant said the filing for self employment (even with a tiny business and a low income) is unbelievably complex and that I should definitely avoid going there.
I have been very hesitant about filing as I’ve been living entirely in Canada for over 40 years and have been a Canadian citizen for the past 10 years. I’ve never traveled with a US passport (except in 1971 when I arrived in Canada), never voted in a US election etc., so i don’t want to admit US citizenship by filing, but I don’t think I have a choice if I want to renounce and get a CLN..
I thought if I filed the 3 years, then wait awhile to renounce, I can say that I’ve been compliant with the IRS and thereby avoid filing for 5 years. If there is a huge backlog, maybe I can get away with this??
I really resent having to pay $450 to renounce, but from what I’ve read on this site, I don’t think you can get a CLN if you became a Canadian citizen after the mid-1990’s. I want to be able to continue to travel to the US to visit relatives, and I refuse to get a US passport. I also want to be free from worrying about FACTA in 2013.
This whole mess is so confusing and frustrating, and like so many of us I feel caught in a nasty trap with no easy way to escape.
@somerfugl: I think some of the folks who filed got $300 back–even though they had not paid anything and didn’t owe anything. I think that was for 2008, but one of them could confirm the date. It’s bizarre. The $300 was for the stimulus package. If you file (and that’s still a big If) and got the $300, you could use that towards your $450 to renounce.
However, I think you can relinquish if you became a Canadian citizen with the intent of relinquishing and you haven’t done anything since then to reclaim. There is no fee to relinquish and you only need one appointment. Can someone with more knowledge of that let somerfugl know. Also, my understanding is that you do get a CLN (when they finally mail it) after you relinquish or renounce regardless of when you became Canadian..
I think Petros just renounced last year, then applied to relinquish and is awaiting his CLN. Petros, is that correct?
@Blaze; Thanks for the info. I’d definitely prefer to relinquish as I’ve not done anything to reclaim. That is why I’m holding back on sending in the tax forms. if anyone has experience or advice on this I’d really appreciate it.
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Hello, I paid the exorbitant FBAR penalty of 20% of the highest balance and now want to know if there is some class action lawsuit or claim being made to the IRS that I can join?
@brian,
I don’t know of any class action lawsuit or claim being made to the IRS, but if your think you should have been given FAQ 35 consideration, or a lessor penalty using normal discretion in an “Opt Out”, I would call the TAS, DC office to explain your situation and Facts and see if they have any suggestions or help.
Their TAD to the IRS, called for just such adjustments. Shulman has failed to respond formally, but still will have to respond to a Congressional Commission, I think. So, there might still be some slight hope here. Give a call. Nothing ventured, nothing gained.
See this recent letter by ACA to Commissioner Shulman
http://isaacbrocksociety.com/2012/03/09/aca-writes-commissioner-shulman-about-unfair-irs-treatment-of-americans-overseas/
To fearful expats, for what it’s worth, I just read this on http://overseas-expat-taxes.escapeartist.com/fbar/ (a shill for Greenback tax services):
“If you are a US Expat and have not filed the appropriate forms, don’t worry, generally speaking the IRS has been very lenient with US expats who did not know they needed to file the FBAR forms.”
@ Howard: Ive read and heard the same thing from Greenback and am wondering how they can appear so confident in regards to expats just filing the missing paperwork while in other places you have people screaming that the sky is falling and get into an OVDP now!
Any longterm participants have an opinion about this?
@anonymouse.
Well, I think there is adequate information on this web site, for you to asses the correctness of that statement for yourself, but I would take all recommendations, or generalized comments like this from any forum that is trying to get your business with a ‘grain of salt’. It all depends on your facts and circumstances.
There are those that have taken the QD (quiet disclosure) route with amended returns, file late FBARS with a reasonable cause argument, and then are now in the waiting for the statute of limitations (SOL) period to expire. So the truthful answer is we don’t really know.
We do know a lot more now about how Opt Outs from the OVDI programs are being handled, and there is some cause for hope that the IRS is going to use discretion “to be more lenient”. I would read Moby’s story that is on the front page of Isaac Brock.
http://isaacbrocksociety.com/2012/03/10/moby-opt-out-update/
One thing for sure, doing something, or doing nothing, comes with some risk, and assessing that risk has not been a simple manner as much of the IRS actions/processes are pretty opaque.
If you decide to follow “greenbacks” recommendations, you are still going to have to use a lot of “LCUs” to become compliant, and there are others that are refusing to do this, again depending on their circumstances and POV.
I would continue to read more here, and recognize this year, with the new form 8938 you have some real conundrums to deal with when you do your taxes.
I might recommend this recent article to you on Accounting Today.
http://www.accountingtoday.com/ato_issues/26_3/FBAR-FATCA-put-pracs-on-alert-61871-1.html?pg=1
Forgive me, I need somewhere to vent…. I am almost finished my US tax forms It is all clarity personified until I decided to see if I am supposed to include the AMT. I have just assumed in the past it wouldn’t apply to me, but as i have heard someone say it is applying to more and more people, I decided to look into it. I can’t see why i would, as I’m not taking any weird deductions. hardly any actually besides the standard ones and the foreign tax credit, which wipes it all out, but in order to see if i need to file form 6251, I need to complete 6251, and this form must be the utimate in orcish. There is an AMT assistant that is supposed to tell you in a few easy questions whether you need to do the 6251. It just says i need to complete 6251 to see if I need to file 6251. I can actually understand the 1116 (Foreign tax credit) and can do the rest of my tax forms independently, but this…….. Perhaps it was inserted by the H&R Block Orcs to make sure no one would be able to do their own tax forms. Does anybody actually understand this stuff…..AAAAAAARGHH……….. (Tomorrow i am calling my accountant, but my husband is away so I have no one to complain to now.) Thanks for listening.
@canuckdoc, I commiserate – I’ve been trying and trying, but I just can’t understand some of the forms or what counts as what – to even decide WHICH form it is – as clear as muck. Everytime I think I’ve got it, it slips away – plus I’m terrified of making a mistake….
What, complaints about the complexity of the forms. I am shocked, just shocked! 🙂 Don’t you know you are completing the best income tax system in the world that money can buy? We are the BEST! This is exceptional America you are talking about, and how can it be difficult, when it has been designed by the “best and brightest” the IRS has to offer? You must be doing something wrong, and it is all your fault!
Soldier on, dear comrade. You will eventually get it right or not. We will tell you when we send you the penalty notice. LOL
mvh
They will be sending it to me in the insane asylum! I actually found a site with a “course” for tax preparers on the AMT. It described it as a “mess” and that very few people who have to report the AMT do their own taxes (less than 1% I think it said) but it helped in that it explained what it is trying to do. I’m sure it is a great income producer for tax preparers. Apparently, it is a “parallel” tax calculation which was originally intended to make sure the really rich didn’t get away with paying no tax, but ends up with all kinds of unintended consequences partly because the exemption amount is not indexed. It even appears to have it’s own separate calculation of the Foreign tax credit, which is where I completely lost any ability to understand the gibberish.
@canukdoc
AMT Problems on the IRS receiving end: http://www.accountingtoday.com/news/IRS-Commissioner-Shulman-Addresses-Tax-Delays-62087-1.html?ET=webcpa:e2331:241779a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=WebCPA_Daily_032312
..discusses IRS PROBLEMS — delays caused by AMT patch (so after they get your AMT-related return, canuckdoc), the status of the IRS’s tax return preparer program and identity theft. “Shulman ended his statement during his testimony before the Ways and Means Oversight Committee calling on them to pass the annual patch for the AMT and resolve questions over already-expired and soon-to-expire tax credits, or else they could once again delay the start of next tax season.”
Shulman He noted that the IRS had already instituted an agency-wide hiring freeze and has only been replacing attrition on an exception basis. Attrition savings were not sufficient to meet the 2012 levels, however, so the IRS resorted to voluntary incentives designed to accelerate retirements of those who were retirement-eligible, or close to eligible. As of March 5, 2012, buyout incentives were given to approximately 1,000 workers, Shulman noted. “As a result of these measures, the IRS has approximately 5,000 fewer staff on the payroll this filing season, as compared to last year,” he said. “Of the 5,000 person reduction, approximately 3,000 are in Enforcement, with the balance of the reduction principally coming from Taxpayer Service.”
So you’d think that having millions of no tax owing returns from abroad coming in is not what they should be trying to get at this point in time. Unfortunately, they’ll probably just take that a challenge to make them all have tax owing by passing some new stupid rule. Everyone in the US seems to be worried only about their refunds. As long as the refunds are fast, everything is fine there.
@canuckdoc
Canada also has a very complicated AMT tax law. I remember learning about it in a course, but thankfully have never had to use it for a client.
Last year the IRS stopped mailing us the overseas filers tax package. It is very difficult to find a telephone number to request the forms be mailed to us. The 800 numbers no not work from Canada and every local U.S. number we have tracked down and tried just drew blanks. The nearest U.S. consulate is over a hundred miles away and is not phonecall friendly (not physically very approachable now either due to security measures). One IRS “agent” or whatever told us they don’t mail forms so get them from the internet but we said that was not doable for us. She had never heard of FBAR either. It should be a simple thing to get the forms but it has proven not to be so for us. Any suggestions?
Em
I hate to say it, but the internet is the source these days of everything. That is the simplest of suggestions. I am not sure why that is not doable for you. If you don’t have access to the internet, or not comfortable navigating the IRS.gov web site, surely there is someone who could help you. If nothing else, you could probably use the internet at a Library and print out what forms you need there, or just order up Turbo Tax and all the forms are available in it. So, you do have a lot of options, and really don’t need the IRS package that they have discontinued.
Em… You must have internet access as you are posting here, so would like to know more about what your problem is with obtaining the forms at IRS.gov…
You can order Turbo Tax here.
http://www.turbotax.com/lp/ty11/ppc/blkbrd-dlx-nav.jsp?cid=ppc_msn_b_stan_dk_us_hv-trbtx-mn&adid=817830490&skw=Turbotax&kw=%22turbotax%22%20&ven=msn&srqs=1&
Thanks for the reply, Just Me.
Navigating the internet is not a problem. Keeping a printer filled with $50 ink cartridges is though.
It just seems to me that if they want people to file they could at least make it easier to obtain the forms without any cost involved. I really resent paying any amount for the “privilege” of subjecting ourselves to the onerous task of completing all that paperwork every year. BTW, if I hadn’t been thumbing through the overseas filers instruction book over a decade ago I would not have been aware of FBAR. It may just mean another trip to the U.S. will be needed to pick up the forms (family to visit anyway).