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.
Fincen proposes changes to FBAR;
http://lawprofessors.typepad.com/intfinlaw/2016/03/fincen-proposes-revising-fbar-rules-for-certain-financial-professionals.html
FINCEN posted Notice of Proposed Rulemaking (NPRM) in Federal Register, for comments.
^ Wow. And the beatings continue until morale improves.
That is downright scary, badger — that someone will follow this firm’s advice! Thanks for highlighting what may be a costly error for those who even read their statement that does not appear to have been checked out by competent authority.
Here is what the IRS site says about RRSPs on FBARs:
Page Last Reviewed or Updated: 11-Dec-2015 https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR
The following educational products are available for learning more about why, when and where to file the FBAR:
https://www.irs.gov/pub/irs-utl/IRS_FBAR_Reference_Guide.pdf
Badger wtf? When I open that link, the first thing it says is that RRSPs are FBARs reportable.
Duke of Devon,
It is NOW an entirely different article when opening the link. It looks to me like the article that appeared with link badger provided has now been removed. I put a comment there asking if they had information other than what is on the IRS site — if not, the information in their article was very dangerous advice. My comment showed as *published* and now the former article is GONE and I certainly don’t see my comment to the former article anywhere on their site.
What we get to in the link that badger posted in the comment is ABSOLUTELY NOW CHANGED to a former article on Canadian RRSPs and FBARs!
The “About” page is laughable, considering the circumstance.
And now this note appeared:
“UPDATE: As of 2014, you will need to report RRSP’s on your FBAR as well as 8938”
2014 has nothing to do with the requirement that RRSPs are reportable on the FBAR. They were reportable before then.
Re: Bordersbookkeeping’s about page. They mention that they enjoy solving problems for their customers. It appears as if the first “problem” they need to solve for their customers is to refer them to a tax preparer who actually knows what they are doing before Borders screws up everything.
Is the presidential election driving you crazy? Here’s how to move to Canada ……….
http://bloom.bg/1M8ZHJ7
would like to hear from canadians re driving across the border? what is going on? are you being detained? turned back?
@SAMUEL SPETZIGUE
This person claims we are:
http://www.taxchambers.ca/irs-border-crossing-delinquent-u-s-taxpayers-irs-homeland-security-cross-fire/
@ Samuel,
We have a thread where people post their border-crossing experiences at: http://isaacbrocksociety.ca/2013/09/19/question/
and Maple Sandbox has this one: http://maplesandbox.ca/2012/crossing-the-us-border-on-a-canadian-passport-showing-a-us-birthplace/
Generally no hassles and definitely nothing drastic has been reported re the border. They’re good threads to keep an eye on to see how things develop (or not) as time goes on.
Bubbles. The article you quote is from a compliance condor and is not just unreliable it is untrue. besides that the OP said Canadians. Even if he meant Canadians with US place of birth, we have had no reports of CAnadians being turned away. Repeating BS isn’t helpful.
Have you taken up the role of moderator now, Duke? We all know that it’s BS, I was merely directing our new guest there so he can have his way with the condor if he so chooses.
Beware of scam phone calls purporting to be from the IRS, as well as fake notices – now mimicking IRS mail:
http://www.dontmesswithtaxes.com/2015/07/us-telephone-tax-scam-crosses-border-into-canada.html
U.S. telephone tax scam crosses border into Canada
Thursday, July 30, 2015
Attention: Revenue Minister of Canada Diane Lebouthillier!!
SAMUEL i live on a border town with a ton of people in this situation ,,, and i have never heard a peep of anyone having any trouble or question asked when at the border!!!!! other then the normal routine questions
@Bruno;
We’re trying to track this, but can only speak to the experiences actually posted here. See the thread below;
http://isaacbrocksociety.ca/your-experiences-banking-dealing-with-consulates-entering-the-us/ and here also;
http://maplesandbox.ca/2012/crossing-the-us-border-on-a-canadian-passport-showing-a-us-birthplace/
Hi all: I have question regarding the foreign streamline procedure. I am a dual NZ/US citizen. and I am one of those noobs who have recently discovered the US reporting requirements regarding tax and foreign bank accounts (the dreaded FBARs). Anyhow, since finding out about these and the possible penalties, I have gone through the 5 stages of grief and I think I have finally reached the final stage “acceptance” (although I do revert back to stage 2; anger, fairly frequently!). I finally, decided to come into compliance through the streamline (2014-2012), then go back and file an extra year of tax (2011), and file this year 2015 on time (totally 5 years) so I can renounce and rid myself of this cumbersome accident of birth!
This is all until I saw form 14653, and I am indignant to putting my name to such rubbish! Not to mention distrustful of the IRS (i.e. you apply to the streamline, write a stupid non-wilful certificate, then you don’t even know if you will be accepted or not (and I’m still not clear if we ever find out if we are rejected and what are the consequences of being rejected?).
So here is my question, should I just send them 5 years of return, 6 years of FBARs+ this years FBAR on time (I do have about 150K in savings), and I certainly don’t want to pay them any penalties on my hard earned cash, all from non-US source income and have been taxed (at a much higher rate than the Us taxes) in this part of the world!
Thoughts? Ideas? Opinions?
@sinsofthefathers,
You can file more than 3 years of taxes under streamlined (2011-2014 in your case). If you’re going to do streamlined anyways, might as well get all 4 years into the “amnesty”.
My guess is that the IRS is going to be totally overwhelmed with streamlined filings. Given that their budget keeps getting cut, they won’t have time to go through all of them. So they’ll focus on the ones where they might be able to get a return on their effort. This is not you. If you have no assets in the US, it won’t be easy for them to force you to pay. And if you’re going to renounce anyway, you’ll be out of their clutches. They will be focusing on high net worth individuals with assets in the US that they can easily grab. My guess is that, if you file streamlined, your returns will sit in a pile collecting dust until the 6 year statute of limitations passes. You probably won’t hear anything from them.
You’re right, form 14653 is a load of *&^%! If you decide to go down the streamlined route, just write them a little essay on how you had no clue you had to file US taxes/FBARs and how you’re a little fish living a totally normal Kiwi financial life.
Disclaimer — I am not a lawyer or a tax professional. The above is my opinion (and I’m pretty opinionated on this topic). Hopefully others will give you their opinions too. Then you can make whatever decision you can live with.
@sinsofthefathers
If you are going to renounce this year you will need to file 5 years 2011-2015 + a partial year 2016 up to your renunciation under the streamlined procedure.
You then should file the 8854 by June the yr following renunciation which asks you to certify that you have filed 5 complete years in order to fully check out of the US tax system, otherwise you would be considered a ‘covered expatriate’.
Phil Hodgen has an informative, well balanced Blog here on your choices.
http://hodgen.com/will-your-future-self-hate-you/
@sinsofthefathers – I reacted the same as you to that creepy streamlined certification form. I actually had already filed the FBARs, marking them “Streamlined Procedures” as directed, before I got round to examining the grovelling certification form.
Rage and contempt ensued (again). I went back and amended the FBARs, changing the “Streamlined Procedures” option to “Didn’t know I had to file. Have since filed the 8854 and left the building. 🙂
PS sinsofthefathers, be aware you don’t have to complete the tax-compliance stuff before renouncing. Renunciation gives a wonderful lift to the spirits and puts you into a much better frame of mind for polishing off the IRS paperwork, or so I found. 🙂
@sinsofthefathers, for additional input, try also asking on and reading this thread;
http://isaacbrocksociety.ca/renunciation/
sins of the fathers. You are right to question the streamlined process. It is a spawn of the devil. It was designed for those, unlike you, who need or want to come back into the system.
Renounce first. Then decide if you need a clean break or not. If you do, file 5 yrs. of taxes and 8854. There is a legitimate argument that you do not need to file FBARS. Bob’s your uncle.