US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
They do that. First you get the happy message: Congratulations! Your FBAR submission has been accepted for processing by FinCEN’s BSA E-Filing System. You will be notified via email when processing is complete in 1-2 business days.
Then, a few days later (like I finally just did) you get the more solemn:
Your FBAR submission has been acknowledged by FinCEN and assigned the BSA Identifier: XXXXXXX
The latter means, I presume, that either some human or some automated processing algorithm has made sure all the required blanks are filled in and the FBAR now resides in FinCEN’s informational dungeons. I know for certain that they check, because around 12 years ago, when FBARs were still paper, I received the scare of my life when mine was returned to me by post saying there was an error! The error turned out to be: I hadn’t written at the top which year it was for. So, yes, somebody is making sure all the i’s are dotted and the t’s crossed.
Oh, and I can sleep now, until next June 15, when the 1040s wing their way to a government that has little else to do with my life other than making me miserable.
FBARs are processed by computer. They have millions coming in and don’t know what to do with them. Story goes in the paper days that they sat in boxcars in Detroit . The fact that your’s was processed means nothing
@Portland: All I cared about was that my FBAR didn’t trigger some immediate red flag. The fact that whatever silicon chip it went through did not do such a thing is a big relief to me. Doesn’t mean it won’t happen later, just that it went through now without incident.
I never had a confirmation for either the tax return or fbars. The tax returns went to Texas, the dumb paperwork for the RESP went to Utah. I sent them by courier and requested a signature which I was able to print for my records. The only prove I have for the fbars are the copies received from accountant. I also sent something to PA but can’t remember what it was anymore…at any rate sent by courier and have signature. I was honest about the accounts and my husband a Canadian was hopping mad that I had to report! On the Fbars, while I told them I signed on (7) of my employers accounts, they only got his business (CRA) number and contact info. That way they had to go back to CRA who would tell them that he was Canadian.
“I also sent something to PA but can’t remember what it was anymore…at any rate sent by courier and have signature.”
A copy of Form 8854. The address of that office in Philadelphia is supposed to be secret. Congratulations on finding the address and getting a signature.
Not really sure which part of IBS this fits best into to, but … Having renounced US citizenship what’s the situation if I wanted to gift a US citizen or US company some money? Are there any special taxes that would need to be paid because I’m an ex? This is just a hypothetical question in case I ever win the lottery!
No possible problem. Just don’t give it to a political party. If a charitable donation, it might not be deductible.
@portland, thanks. Didn’t think there was, but never sure about these things really. As said, just hypothetical atm. But something I might like to do some day if I ever did win the lottery.
@BirdPerson thanks for that. Knew sort of about the covered expat thing, but wasn’t sure if there might be something similar if you’re not a covered.
I wonder how heirs would even know about the ‘covered’ thing, particularly if the overseas non USC dies years after renouncing. Not unless s/he told them.
@BP & Medea
As far as I know, the covered question has yet to appear on the IRS Estate and gift tax reporting form that is filed by the heirs. Maybe the IRS realize this proposal would be counter productive.
“Court of Federal Claims Holds that Not Reading The Schedule B Foreign Account False Answer Justifies FBAR Willful Penalty”
Stipulated facts include:
“• Plaintiff did not review her individual income tax returns for accuracy for tax years 2003 through 2008. Stip. ¶ 46.
• Plaintiff answered “No” to Question 7(a) on her 2007 income tax return, falsely representing under penalty of perjury, that she had no foreign bank accounts. Stip. ¶ 48.”
A comment in the article:
“…Practitioners should note that this rather cryptic holding seems to put at risk all taxpayers who on the Forms 1040 checked “No” in the foreign account box on Schedule B. Of course, Kimble’s facts beyond that Schedule B check mark were consistent with the willful penalty but as the Court posited its conclusion perhaps the “No” answer only would suffice…”
@ Stephen Kish
Both Kimble and Bedrosian are US residents which made it easy and apparently penalty profitable for the IRS to drag them into the US unjustice system. Their judges need to be given a good dosing of castor oil to rid themselves of the “kool aid”. (Afterwards a few sweet sips of empathy would be appropriate too.) Willful does apply in these two cases but it’s on the IRS side — willful prosecution for the purpose of reaping FBAR penalties. But, of course, my opinion counts for naught.
You may recall that I wrote “Fifth Amendment” on the Schedule B question.
It seems to me that there was an earlier court decision that came to the opposite conclusion–that a no answer was not an indication of willful FBAR avoidance. But it’s been about 6 years since I saw that.
There’s a difference between giving a false answer and refusing to answer.
However, as far as I can tell, Tax Court is the only US court that still upholds US Supreme Court rulings US v. Sullivan and Garner v. US. Circuit courts have consistently overturned Supreme Court and overturned the 5th Amendment. Anyway, those Supreme Court rulings recognized the right not to answer specific questions as long as the full amount of income was declared.
Clearly they would also find some if not all FBAR fines on foreign residents home accounts to be excessive.
Trouble is no one can afford the fight.
There are still many people grappling with US extraterritorial taxation, FBAR, FATCA, etc.
Lots of responses from Canada, UK, France, etc. – see n= of respondents at end of report.
Caveat; I’m not a DA, and do not belong to any political party. Posting merely for those who might want to use the results as evidence of the continued depth of the problem and burden.