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.
@allou,
Thanks for making a list of the links you have gathered. You have done a lot of work in the short time you’ve been aware of your situation. Good for you!
Perhaps you could put what you have gathered into a comment here and either Petros will see it or one of us could pass it on to him. Petros is the Administrator of this vast resource we have here and I believe the only one able to put on an additional link in Resources.
(For all newcomers, we thank Petros for the start and maintenance of this Isaac Brock site from which we all get our peer-to-peer support and so much relevant information. For any who are able and wish to, there is another link at the bottom of the home page, titled “Financial Contributions”.)
I will list the links I have found useful, but am also very busy with catching up with Fbars and 1040s (whic I only discovered I had to file 2 weeks ago). I can recommend contacting the IRS and Treasury Dept. international advisors – the numbers are on the irs website. Just remember to have the forms you have questions about and a list of your questions all printed and ready to ask. My questions have mainly been about what box to check etc. and they have been helpful. Use a cheap international calling card, or I suppose Skype, as you may have to wait – longest wait for me was 20 minutes.
Most of all a huge thank you to the IBS poster who have been so helpful. I am gradually becoming “normal” again, although with tons to do – cheers
Good luck in completing your filings, allou. You have had to be a fast learner.
In reality, the IRS website is the place for all of us to find the actual IRS up-to-date requirements for international taxpayers as set forth by the US IRS. That is the site where accurate up-to-date information must be sourced. A quick Google search by any of us will get us for “IRS international tax” will get us there and there is an abundance of information. Pacifica does maintain a source of and links to all of the Department of State forms (and other relevant information) for anyone wanting to learn and make decision about renunciation or relinquishment of US citizenship. Those resources are more scattered on the general internet search.
As I see it, the better use of Isaac Brock is for us to discuss how those IRS requirements (found at within the IRS resources) have been utilized by those of us here and help with “how to”, the ramifications of such to our families, how we can advocate for change, etc.
@meadea, em, iamquincy
Schedule B forms
I have to file a Schedule B for 2007-2012. I can only download 2009-2012 on the irs website. Any suggestions as to what to do for 2007 annd 2008 returns?
Thanks from allou – plodding along in “form purguratory”
re: Schedule B 2007-2008 – have found them online, so don’t bother to reply to my last post.
TAS research yields insightful data, informs advocacy & strengthens the NTA’s authority/argument before IRS/Congress.
http://1.usa.gov/Wb88cA
Congressman Himes (Dem – Connecticut) supports a bill to stop the double taxation jeopardy for US resident commuters travelling between states: http://minutemannewscenter.com/articles/2012/05/18/westport/news/doc4fb64a31c65d8704123631.txt
‘Himes backs bill to reduce double taxation of occasional commuters
Published: Friday, May 18, 2012’
……….”“While we depend on income taxes to fund our roads, education, and other investment in our future, it’s not fair that some employees have to pay income tax to two states a time,” Himes said. “This legislation is a win-win for us: Connecticut residents who work in New York occasionally will pay less in income taxes, and the state will realize increased revenue.””………..
But, ‘constituents’ ‘abroad’ will just have to continue to accept US double and extraterritorial taxation on their principal residence, registered savings accounts, etc. and punitive restrictions on their ability to save for their children’s education and their retirement – local savings all deemed ‘foreign trusts’ by the US. US resident commuters however (from the ultra-wealthy Greenwich Connecticut area http://en.wikipedia.org/wiki/Greenwich,_Connecticut – commuting into NY City) are much more compelling constituents than ordinary US persons and their families ‘abroad’ taxed and penalized by the US Congress, IRS and Treasury for merely being born and or living outside the US.
In contrast, fellow Democrat and Congressperson Carolyn Maloney actually lists Overseas issues on her website http://maloney.house.gov/issue/overseas-americans .
Himes, grew up, lived, studied, and worked outside the US http://en.wikipedia.org/wiki/Jim_Himes and must know of the issues that overseas Americans face. …”Born in Lima, Peru in 1966 to American parents, he spent the early years of his childhood in Peru and Colombia while his father worked for the Ford Foundation and UNICEF. As an American abroad, Jim grew up fluent in both Spanish and English and was raised with an awareness of the unique position of the United States in the world. At the age of ten, Jim moved with his mother and sisters to the United States.
Jim graduated from Hopewell Valley Central High School and then attended Harvard University. After completing his undergraduate work, Jim earned a Rhodes Scholarship, which enabled him to attend Oxford University in England where he continued his studies of Latin America, including research in El Salvador.”…..”he worked extensively in Latin America and headed the bank’s telecommunications technology group.”
This Congressman is concerned about state double taxation of commuters, but did he support the Maloney/Honda call for a Presidential Commission to look into our double taxation and other pressing issues created by US federal extraterritorial citizenship-based taxation of those born and/or living entirely outside the US? http://thomas.loc.gov/cgi-bin/query/D?c113:9:./temp/~c113PZ0aUL::
According to this, Congressman Jim Himes was not a co-sponsor of the bill 113th Congress (2013 – 2014) H.R.597 . See http://thomas.loc.gov/cgi-bin/bdquery/z?d113:HR00597:@@@P
And, is not part of the Americans Abroad caucus:
http://www.aaro.org/lobbying/americans-abroad-caucus
Americans Abroad Caucus membership list:
Carolyn Maloney (D-NY), Chair
http://maloney.house.gov
Joe Wilson (R-SC)
http://joewilson.house.gov
Susan Davis (D-CA)
http://www.house.gov/susandavis
Michael Honda (D-CA)
http://honda.house.gov
Henry Waxman (D-CA)
http://www.house.gov/waxman
Sanchez, Loretta D-CA
http://lorettasanchez.house.gov
Alcee Hastings (D-FL)
http://alceehastings.house.gov
Janice Schakowsky (D-IL)
http://www.house.gov/schakowsky
André Carson (D-IN)
http://carson.house.gov
Michael Capuano (D-MA)
http://www.house.gov/capuano
James McGovern (D-MA)
http://mcgovern.house.gov
Chris Van Hollen (D-MD)
http://vanhollen.house.gov
Gregorio Sablan (MP)
http://sablan.house.gov
Terry, Lee (R-NE)
http://leeterry.house.gov
Rush Holt (D-NJ)
http://holt.house.gov
Donald Payne (D-NJ)
http://www.house.gov/payne
Gregory Meeks (D-NY)
http://www.house.gov/meeks
Mike Doyle (D-PA)
http://www.house.gov/doyle
James E. Clyburn (D-SC)
http://clyburn.house.gov
Steve Cohen (D-TN)
http://cohen.house.gov
Michael Conaway (R-TX)
http://www.house.gov/conaway
Charles Gonzalez (D-TX)
http://www.gonzalez.house.gov
Kay Granger (R-TX)
http://kaygranger.house.gov
Gerald E. Connolly (D-VA)
http://connolly.house.gov
Jim Moran (D-VA)
http://moran.house.gov
Frank Wolf (R-VA)
http://www.wolf.house.gov
Donna Christensen (D-Virgin Islands)
http://www.house.gov/christian-christensen
Caveat: this is not an endorsement of any particular professional. Just came across this during a search.
Interesting – I remember bubblebustin mentioning having simultaneously the assistance of a paid professional tax lawyer, as well as obtaining the help of the TAS. The site I found (see below) is the first time I have seen a cross-border practitioner’s website mention the Taxpayer Advocate Service, or describing working together with them to get a problem resolved http://uscrossbordertaxblog.com/internal-revenue-service-taxpayer-advocate-service/ . In my particular experience, none of the crossborder or other ‘professionals’ I contacted mentioned the Taxpayer Advocate, the TAS services, or how the TAS might assist those who either cannot afford the professional fees, or have gone as far as they could afford in paying for professional assistance, yet are still far from achieving ‘compliance’ or a safe resolution.
@badger
Our lawyer didn’t mention TAS to us, we decided to call them after the NTA in her 2011 Report to Congress revealed that we’d been duped by the IRS into entering OVDI. We told him we’d done so and he said he thought it was a good idea.
Thanks for the correction about how that came about @bubblebustin.
Am interested to know if anyone ever had their advisor tell them about the Taxpayer Advocate. Mine certainly didn’t, even when I asked for advice about my options given finite resources.
Last night I had the unpleasant task of informing an affected person of the woes of US citizenship based taxation. At the end of a long conversation about football on the Tube coming back from a game he asked me where my accent was from. He then told me he was born in Cleveland, Ohio to British parents and lived in the US for a grand total of 3 weeks. I can still picture the look on his face as I told him. Poor guy had no idea. Luckily he is still a student so to be able to file 5 years and renounce should be less onerous than for those more advanced in life. I directed him to this website and told him that under no circumstances should he consider OVDI.
To the accidental American I spoke to last night: On the off chance you read this, please feel free to contact me via the administrators and I will help you the best I can.
Does anyone have a clue how to 8938 a foreign paper stock? I sold it this year at breakeven so I’m thinking of not even bothering, but of course my huge $20 of dividends ($4 of tax liabliity) shows up on my bank statement. I hate loose ends.
8938 wants a description and ID number… what’s the number on a paper stock (that I don’t even have anymore?) the symbol? Some random number?
Man seriously I wish I knew this was all coming years ago… I would have planned so much better
@HKGS
If you hold the shares in certificated form (ie the registrar issued you with a paper share certificate which you keep in a safe place but is not deposited within a brokerage account) these would be a specified foreign financial asset and these go in Part II (as opposed to accounts which go in Part I). I would:
1. Write “yyy shares in xxx” in Box 1 of Part II (Other Foreign Assets)
2. Do an interwebz search for the ISIN of the security and put “ISIN: xxxxx” in Box 2. ISIN is the International Securities Identification Number.
3. Fill out Box 3 (if applicable), Box 4, Box 5 (assuming the shares are quoted in a foreign currency), Box 6 and Box 7
Rinse and repeat if you hold other shares in certificated form.
@anyone who has filed fbars!
I have my info ready to file but am confused as to what to do with the foreign “IRA-like” account that I have in a local bank. I can put money in, but it doesn’t pay out (in monthly payments) until I retire. I cannot take anything out before retirement and cannot close the account which is managed and invested by the bank. Sometimes there are gains, sometimes losses. Should I list it as a “bank account”? Are the possible gains in any year taxable income, even though I don’t have access to them? What about losses?
I have read various IRS publications and expat tax advice, but can’t seem to figure this out
Thanks!
@allou It is still a financial account so it goes on the FBAR. You can list it as other and write the type of account in the box. On mine, I wrote RRSP in the box. If you aren’t able to defer the income in the account according to a tax treaty, (like Canadians can with the RRSP) then you have to include losses and gains on the 1040, schedule D.
My husband and I applied for the Streamlined Procedure on February 25, 2013 (3 years of taxes and 6 years of FBAR’s). We just received an “assessment” from the IRS for the 2009 tax year, where they claim that we will be receiving a refund of over $300 (Making Work Pay Credit). Has anyone else received refunds that they were not expecting? We owed/paid no tax.
annie, the Making Work Pay refund comes with strings attached. You should look it up and check but if you take the money, there is something about it that needs to be accounted for on your next years tax form. Or something. My husband is more familiar, but just make sure that you research it a bit before you cash the check.
But your initial question, yes, it is possible to get a refund. The IRS goes over your returns to check your math and such and sometimes, instead of you owing them more – they owe you.
As mentioned above, the Streamlined Procedure requires 3 years of tax returns and 6 years of FBARs.
Anyone know, or have an opinion on, whether a person can file 5 years of returns in the SP? The (obvious) reason is to get compliant to get out while the going is semi-good.
TIA
@annie
Congratulations on hearing back from the IRS so quickly. Why if you filed years 2010, 2011 and 2012, would they be assessing you on 2009, or am I missing something?
@bubblebustin
Thanks, I do feel fortunate (so far). I filed 2009, 2010 and 2011 tax years under the streamlined procedure. The 2012 tax return will be filed timely. The letter referenced 2009 only, so I am concerned that I might receive bad news about 2010 and 2011 in future letters.
@YogaGirl
Thanks for the “heads up”. I didn’t/don’t want any money from the IRS. I searched for the problems that you suggested I might have and I came up with one pitfall. It seems that the withholding tax deducted from peoples paycheques was not sufficient enough in the next year and they ended up owing tax instead of receiving the tax credit. Does that sound like the problem you mentioned?
@tdott
I don’t know if your idea (5 years backfiling) is a good one cause I was afraid of the possible penalties for those 5 years (instead of 3 years) if we were not accepted into the Streamlined program. For that reason, we chose to do 3 years and then stay compliant for 2 years (2012 and 2013), then renounce/turn in green card
@iamquincy
“include losses and gains on the 1040, schedule D.”
Thank you again. After posting the question I did figure out that I had to list it as a financial account and then when I had gains I wrote those in in line 9a (ordinary dividends) on the 1040. I then figured the amounts in as unexcluded taxable income (although it is already taxed here where I live, we have a capital gains tax automatically deducted via our tax system)
The years there were losses I just wrote -0-. I still end up with zero taxable income on the US returns and don’t need to start figuring tax credits. This is an account the bank invests and I can’t buy or sell indivdual holdings.
Once again thank you so much for your guidance – it has been a tough 3 weeks but I have learned a lot.
@tdott
“Anyone know, or have an opinion on, whether a person can file 5 years of returns in the SP?
This would be very N2K (nice to know). Maybe 3 yrs SP and then 2 -3 extra back filed?
I have have several chats with IRS persons via their international phone advisor service and never heard anything about the SP. They did say to file 2012 and then back 5 or 6 years asap – also to file 6 years Fbars to the Treasury Dept.
@annie, yes. It’s always best to research these one time refunds and know the loop holes before acccepting the money. The USG rarely gives out these kind of credits without strings.
@Edelweiss, there are so many ignornant or accidental Americans out in the world re US tax and how it affects them. I was one of the ignornant ones and the surprise of finding out I should have been filing tax forms for years was unpleasant to say the least. If your acquaintance is reading this, then please know you are not alone in dealing with this. Many of us have been/are in the same situation so if you feel you need advice, support, etc, then we’re here to listen/help as much as we can.
Phil Hodgen (Hodgen Law) talks about How to Compute Net Tax Liability for Form 8854