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.
@what to do,
Don’t despair or panic. Many of us have felt the same way, but we have come a long way since we first found out about this. The situation has changed in several respects, for different categories of persons.
You are not alone. There may very well be a solution in whatever your situation is. Stay the course. There is also the Taxpayer Advocate Service. They have helped several of us. Don’t do anything drastic.
Together we are working on this, from several angles.
Take good care.
@what to do
Had I not entered OVDI, I don’t know how I’d be feeling about FATCA today. I imagine that I’d feel pretty scared and trapped because of the mark of a US birthplace. I think to say that if that’s how you’re feeling you are among hundreds of thousands, if not millions of people who feel the same way. I had a thought last night that maybe the IRS will find we did something wrong in our OVDI submission and fine and penalize us more than we believed we would be. Then what would I do? It’s the not knowing how they will respond that is driving me around the bend, but although I’m somewhat fearful, I’m more angry than anything else. But then I’ve read that anger is fear based anyway as it’s to do with the ‘fight or flight’ response.
@what to do,
Your email address is “undeliverable” as you have likely used a pseudo email address. I thought you might be more comfortable discussing your situation with someone by email, but that alternative won’t work unless there is a real email address.
anincog84 –
I have the impression that this situation has received a lot of media attention in Canada. Is it not picked up by US news media?
Your impression is correct. Coverage in Canada, much of it crap. Coverage in Switzerland. Scattered stuff elsewhere. Occasional good stuff in the US, mainly in its international-level press, like Reuters, NYT, Forbes.
The best of the worst is tracked over at USxCanada InfoShop. Read yourself sick!
WhiteKat writes: “I get the ‘what to do’ feeling. Depending on the day, and my mood, sometimes I think I should work on becoming ‘compliant’, then the next day I say ‘fuck that, I owe USA nothing’.”
My feelings exactly (including the expletive!). It’s incredible how just one tiny piece of even slightly good or bad news can swing the decision pendulum from one side to the other.
@what to do: you are not alone. As others have pointed out, you can count on support here at IBS. Personally, I don’t know what I would have done if I hadn’t found this site. With any luck, it will be as helpful to you, both emotionally and instructionally, as it has been to so many of us.
@usxcanada
Just checking your list and you need some recent updates on the subject which I thought were worthy of your list….
This, this and This
@anincog84 Another list, not perfect, is one maintained by American Citizens Abroad here…
Just Me –
Suggestions always welcome. I had passed on the first item and still will pass. The Hill piece is useful and will add. The NYT was passed on, but now will add. The season is slow, the horizon ominous! One of the criteria is selective. Right now, for me, three other socioeconomic political abuse conflagrations burn far brighter than this Brock bonfire, partly because more impact seems possible. It’s all a struggle where mitigation will be the only victory, if even that is achievable. The pragmatic form of mitigation in the Brock circumstance is sauve qui peut. So much more rewarding to organize in person with real faces.
@usxcanada
I understand selective, and thought you might want to consider them… I am some what surprised that you passed on the Andrew Quinlan interview. I know the reporter, George Prior, and he has been trying to highlight the FATCA issue, and thought this was a pretty comprehensive view of the current state of opposition to FATCA and repeal efforts, especially for those new to the subject. Anyway, just curious, as your thought processes. That interest me. As they say, no accounting for taste, and so this is NOT criticism of your pass, just wondering about your criteria.
Re ur Three other socioeconomic political abuse conflagrations ? Could you be lest cryptic? I enjoy your wordsmithing, but sometimes some things get lost in the translation.
As for, sauve qui peut Boy, do I agree with that! 🙂
@usxcanada and Just Me: Thanks for the links.
@WhiteKat: I feel exactly the same way.
To all of you in general: Thanks again for being so willing to hear what must be the same stories and questions over and over again from strangers, and for bringing some comfort by providing a sense of not being alone. How long has this site existed for? Are there plans for a more discussion-friendly setup such as a forum?
What to do, don’t ever take the “easy” way out because chances are it wouldn’t be easy. Just start to do what you need to do to get out of Dodge before F@#ATCA hits the fan and you will start to feel some relief; and these awesome posters here at IBS are very supportive and offer a lot of good advice. We are all in a leaky FBAR/tax canoe up FATCA creek. Let the Brocksters be your oars when you feel you are sinking.
I would like to hear what some of the Canadian-born duals are doing about compliance/non-compliance. Anyone?
@calgary411
Not sure how to contact you
@what to do,
If you will sign in with an email address that works, I’ll be glad to correspond with you that way. In the meantime, there are lots and lots of stories here of what others in circumstances similar to yours have done or not decided not to do (at least for the present). In the end, it takes lots of reading and learning to find the best for you. So many try to provide that and support for each other here at Isaac Brock. We know how hard it is to try to have others understand any of the absurdity.
Tomorrow…
@allou You don’t need to report accounts that are in your spouse’s name only.
I would report interest separately.
@anincog
Your plan to travel and then update sounds reasonable. However if you are a US citizen you do have to travel to the US on a US passport (according to US law). My kids and I have used US passorts on our few visits to the US, even though we are all also citizens of our EU country of birth. Since you were a dual national from birth (even though you didn’t know that) you would be exempt from the exit tax if you ever decided to renounce. The exit tax is an addtional burden on US persons with assets of over 2 million US dollars. This means, as far as I know, all assets. This sounds like a lot of money, but depending on your job, savings, home ownership and not the least the rate of exchange, it is not a tremendous amount.
@iamquincy
“allou I would subtract it from the wages and put it on line 8a and in section 1 of schedule B. The exemption and standard deduction are easy to take. The exemption goes on line 42 and the standard deduction goes on line 40a. Use the box on the left of page 2 on the 1040 to determine the amounts”.
You are a gem, I am learning so much from your comments, not the least not to panic! I will fill out schedule B and deduct the amount from my gross foreign income – that makes the most sense. The IRS advisors did mention exemptions, but did not ask about any foreign interest from banks etc. just said file Fbars.
Since my tax owed will be 0 even if I don’t take any exemption what do you think is the best route?
1. Take the standard deduction on line 40 and the exemption on line 42 (this reduces my gross income by about 9,000 dollars or:
2. Do not take any deductions on line 40 and 42 and do not claim myself on line 6a
I am not interested in any possible refunds from the US, just to get it done properly.
Have a good Sunday!
@iamquincy
“You don’t need to report accounts that are in your spouse’s name only.
I would report interest separately.”
Again a question. Some of the accounts are in my spouses name but I have signing authority=I can move money between our accounts – we both have signing authority over these accounts. In our EU country it is normal to have individual accounts to receive wages, then joint household accounts which we use to pay household expenses. And also savings acounts which give a higher interest than the other types. So a couple can easily have 5 accounts in the same bank. And many persons have at least 2 banks, as most of our banking is internet based. This makes for a lot of Fbar numbers as I understand I have to report each account that is either solely in my name or over which I can sign (move money to/from). Would it be considered a joint account if my name is not on it but I can use the account?
I will have to check out Schedule D – I hope that is the last form!
Please any lawyers here that can confirm whether this is still in effect?
“FILED PURSUANT TO SEC.1.911-7(a)(2)(i )(D) ”
which is to written on top border of late filed US 1040 when owing no tax.
Link to tekst here:
http://books.google.dk/books?id=fr88AAAAIAAJ&pg=PA30&dq=FILED+PURSUANT+TO+SEC.1.911-7(a)(2)(i+)(D)+is+this+still+in+effect&hl=da&sa=X&ei=dZ9qUbnIMcGCtAbW_YAY&ved=0CDkQ6AEwAA#v=onepage&q=FILED%20PURSUANT%20TO%20SEC.1.911-7(a)(2)(i%20)(D)%20is%20this%20still%20in%20effect&f=false
International Income Taxation: Code and Regulations–Selected Sections (2008 …
see page 2047 – paragraph D 1-3 for more information
Another piece of information for late filing of a 2555 (and I suppose a 2555 EZ)
http://www.irs.gov/pub/irs-tege/rp1992-85.pdf
I wish someone here at IBS could gather all these links in one place…please
@CanadaPerson,
You asked ‘what some of the Canadian-born duals are doing about compliance/non-compliance’.
I am one of those unfortunate ‘dualies’; not wealthy, but with enough foresight to have saved for my children’s education and a little for retirement. What I have in the bank is not a lot, but was not easily acquired, nor will it be easily confiscated – I get nasty when cornered.
My approach for now is to wait and watch, and try to stay one step ahead. I have started the process of moving savings out of my bank and into a local credit union. Whether that will make a difference in the end, is hard to say since credit unions are also affected by FATCA though not apparently to the same degree as the big banks. Before the end of 2013, I will open up a savings/chequing in a second much smaller local credit union which is less likely to be affected by FATCA since it has less than 175 million in total assets.
The idea is to have a relationship with multiple institutions in case one decides to ‘rat me out’. Banks will not start investigating existing accounts until 2015, so by setting up new accounts NOW, I will buy some time – more time for FATCA to be derailed or for a class action lawsuit to be filed against the Canadian government should it be so dumb as to acquiesce to USA. All my accounts are jointly held with my spouse currently, but I will take my name off them if I feel the FATCA menance is getting to close. I am hopeful it will not come to that.
At least that is how I feel to day. Tomorrow I could be busy filling out FBARs – just had to add that in case anyone from IRS is reading my emails. 🙂
@CanadaPerson,
Also, I am staying out of US. If a situation should arise where I need to go there, I will send someone else on my behalf.
I think many of those that are informed are working with strategy like Whitecat. The largest population worldwide is no doubt not aware or slightly aware and doing nothing. I have had contacts with lots of local friends who live a life with only a couple months savings above their mortgage payments—barely above the limit. Those are the people who will slip being labeled “rich” by administration instructions—if they just start complying forward they have little risk. It’s the folks who have slugged out a retirement savings who are the most fearful of being labeled “rich” and getting both barrels of FBAR penalties.
Some elements which can cause anxiety, are for those who have been nearly compliant, but not quite compliant. I picture the IRS loving to find a way to GET these people prior to the FATCA bank reporting schedule, where the first bank reporting is May 2015 about their clients activities from Jan 1, 2013.
@allou,
That would be a good job for you as you have been researching. Perhaps a compilation could be passed on to Petros, asking if what you compile could be added to the Isaac Brock Resources.
We all should be aware of getting the most up-to-date instructions (however incomprehensible) from the horse’s mouth so to speak: http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad and http://www.irs.gov/uac/Forms,-Publications,-and-Other-Tax-Products, as well as the one you have identified.
@Mark Twain. You said: “Some elements which can cause anxiety, are for those who have been nearly compliant, but not quite compliant. I picture the IRS loving to find a way to GET these people prior to the FATCA bank reporting schedule, where the first bank reporting is May 2015 about their clients activities from Jan 1, 2013.”
If I am interpreting you correctly, you are referring to people who the banks already know are ‘US persons’ and who are in varying states of ‘compliance’. They need to figure out the best way to ‘dot all their i’s’, and soon. With FATCA you are either all in or all out.