Liberty and justice for all United States persons abroad

The Isaac Brock Society

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.

3,618 thoughts on “US expat tax and FBAR: Discussion thread (Ask your questions) Part Two”

  3. @edelweiss (and others)
    “I was told that a foreign, employer sponsored defined contribution plan is not an “account” but is a specified foreign financial asset. As such, it was omitted from my FBAR but included in 8938.”
    This is what I also tend to think. My Fbars accounts are under the reporting limit for 8939. Would I note the defined benefit pension somewhere? With a value “unknown” or “zero”. I want to do it right, but not go overboard and declare things I don’t have to. Hopefully I can file the 6 years for everything and then say goodbye – I assume “compliance” means I have filed and have a receipt that the forms have been received?
    Thanks for any advice

  4. What does an expatriating US person do about FBARS and the 8854 while still waiting for the CLN ?The FBAR deadline is almost here. The 8854 is supposed to be attached to the FBAR forms and there is no way to get an extension on the FBAR deadline. Can we just go ahead and send them together without having received the CLN? I think that would be risky. Can the FBARS and form 8854 be sent to the Treasury Dept. separately? The FBARS on the deadline and the 8854 upon receipt of the CLN?

  5. Banany,

    I don’t know — but you do want someone who absolutely knows the answer to your question. You don’t want to be deemed a “covered expatriate” for want of the 8854 being late — it is to be filed with your 1040. Perhaps you need to get an extension to be safe — Form 4868: http://www.irs.gov/pub/irs-pdf/f4868.pdf. Can you call those “very helpful” IRS people about the 8854. Send your FBARs in well before the due date to make sure that arrives on time. I have sent mine each year registered, requiring a signature — so I have something that says it my FBAR was received.

  6. One other heads-up on Form 8854. From the instructions it appears that you are expected to file two separate copies in two separate directions: original attached to 1040/1040NR, copy to Philadelphia. Could they trick you into being covered for only filing the original with the return? A pretty reasonable “mistake” if you only looked at the Attachment sequence no. of 112 … Gotchas to the right, gotchas to the left, into the maw of the IRS leviathan sailed the hundreds who thought they were escaping!

  7. @Banany
    “The 8854 is supposed to be attached to the FBAR forms”

    Where did you get that information? According to the IRS instructions 3 separate mailings are required (see instructions for specific addresses):
    1) Tax return (Form 1040 and/or 1040NR + all other related tax forms) + Form 8854(!) by April resp. June 15 (for those filing abroad).
    2) Form 8854 by April resp. June 15 (for those filing abroad).
    3) FBAR by June 30.

  8. @Banany
    “What does an expatriating US person do about FBARS and the 8854 while still waiting for the CLN?”

    Have you renounced (as opposed to relinquished) your US citizenship? How long ago? Either approach (i.e. with or without 8854) entails some risk. Personally I would file as if I had the CLN, since the probability of you being denied it is almost 0%. (Only 1 known case of that, which was a very unusual situation – see “Weber”). If you file as if you hadn’t renounced and then get your CLN shortly thereafter, what will you do? Amend the return? File a late 8854? That would be a real mess in my opinion – but that’s only my opinion as a non-professional stranger on the Internet. 😉 Better to ask someone like Phil Hodgen for his advice.

  9. Edit: “since the probability of you being denied it is almost 0%” should read
    “since the probability of you being denied it is almost 0%, assuming you have renounced.”

  10. Couldn´t one just file the CLN as if it was received within the deadline and then amend with a full years 1040 etc if it didn´t come through? I am pretty sure I read this either here or on exapatforum.
    BTW I have wondered the same.
    Also, can one get an extension to Oct 15 for the 8854 or is June 15 the latest?

  11. I’ve often wondered if the copy of the 8854 that’s sent to Philadelphia can be sent after 15 June if a 4868 has been filed for the 1040/1040NR. I’m guessing that my accountant will need an extension because doing the 8854 will be complicated since our flat is owned on a leasehold vs freehold basis which makes determining its value less straightforward. If she filed my first 8854 with the final dual staus tax return in early October 2014 rather than before the usual June 15 deadline, would I still be OK to send the other 8854 in October too?? So bloody confusing….

    All I can think is of how relieved I’ll be to finally get this all behind me…it will have taken four extremely stressful and financially draining years.

  12. Thank you everyone for the input I already have an extended deadline for the taxes. It is the FBAR that is the kicker because Satan won’t let you extend the deadline for it. I hope the CLN arrives in time for the 8854 to excort the FBAR forms on their ride to Michigan by June 30.
    Meanwhile I think the situation requires calling the minions in Detroit. That should be a real treat.

  13. @notamused I relinquished rather than renouncing which makes things a little more uncertain. I know that 8854 is attached to the taxes as well but I didn’t mention taxes because it’s the f’ing FBARS that are the real stumbling block because there is no way to extend their deadline. Isn’t this an amusing recurring nightmare?

  14. @Banany
    Sigh. The FBARs and 8854 go to separate addresses. See my post above.

    From FBAR instructions (http://www.irs.gov/pub/irs-pdf/f90221.pdf)
    File this form with:
    U.S. Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621

    From 8854 instructions (http://www.irs.gov/pub/irs-pdf/i8854.pdf)
    Where To File
    Send your Form 8854 (or a copy of your Form 8854 if you are required to attach the original to a Form 1040NR or a Form 1040) to this address.

    Department of the Treasury
    Internal Revenue Service
    Philadelphia, PA 19255-0549

  15. @Banany, when did you relinquish again? I’m presuming last year. I was very fortunate to receive my CLN only a month after taking my renunciation oath!! I remember that you congratulated me and am sorry I couldn’t remember yours.

    Mine was one of the fastest here. It’s rather ironic that I will have to wait at least another year before completing all the final paperwork.

    As for employer pensions, my understanding was that defined benefit plans are not accounts for f-bar purposes though defined contribution plans are, especially those that can be portable.

    I transfered my personal pension into my employer’s scheme and could continue to contribute to it even if I left my current job.

    I’m thus sure it would need to be reported on my f-bar and 8938 as a specified foreign asset, plus could arguably be a foreign grantor trust (though thankfully my accountant didn’t think I needed to file 3520/3520A). That would have doubled my tax preparation bill!!

  16. @Notamused Thank you, Notamused. I am an old lady and do get confused. The fbars and 8854 might have ended up on the same haywagon is you hadn’t posted.

  17. There is a typo in the last sentence of my last post. Should read: The fbars and 8854 might have ended up on the same hay wagon if you hadn’t posted.

  18. @banany
    Glad to help. It is indeed confusing to have to sort out what really should be internal communication within the IRS / Treasury. But so it is….

  19. @monalisa I informed the Toronto Consulate of my act of relinquishment on November 5, 2012 (what a great day that was). I just need to fill in the market to market value of my pension plan on the 8854 and it will finally be done. Now where could that CLN be? I e-mailed the Toronto consulate for an eta. Thanks to Notamused, things won’t end up in the wrong places. Sometimes the anxiety from the whole situation of expatriation and final taxation makes my eyeballs turn inside-out and my brain shuts off.

  20. @Banany, I think you will hear about your CLN soon. My son got a call yesterday from the Toronto Consulate that his CLN had arrived and would be sent to him this week.. He renounced Dec.13th. 2012

    Your’s may be in the same lot of CLN’s.

  25. @Saddened
    I e-mailed the consulate in Toronto re the CLN. Their answer was:
    “Our office is awaiting receipt of your approved Certificate of Loss of Nationality. You will be promptly notified once the approved certificate has been received.” Maybe because it was a relinquishment.
    @Mark Twain
    It is shocking the how the IRS takes such unexpected strides to make peoples lives miserable. I wonder what goody they will come up with next. their

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