US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.
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.
@tdott,
I, myself, do not need to file to the IRS, having relinguished many years ago. So I have not met nor used the gentleman I am recommending. His name is Stephen Katz and his office is in the Kitsilano area of Vancouver. I have several friends whom are dual citizens and they use Mr. Katz and all sing his praises.
I believe, he is a former American, who relinguished that citizenship years ago. He is a tax lawyer and has several accountants working for him. I have heard nothing but good things about him and feel comfortable suggesting him.
@Tiger
I just saw Steve yesterday and he’s in fine form for someone who probably has close to 50 years of tax experience behind him! Doesn’t think a switch to RBT is going to happen though 🙁 (probably because if something so horrendous has been allow to continue this long, it will likely never change).
I agree with @tiger.
I have received what I, a non-tax expert, felt was good advice from Stephen Katz. He is at: Steve@stephenkatzltd.com
Assume that we are providing you with the usual all possible disclaimers for this advice.
I re-iterate my ongoing complaint that there are not enough commenters willing to disclose names of “tax professionals” who have turned out to be helpful.
Talk about a coincidence. I was just emailing the submission Bernard Schneider made to the committee on tax reform to Steve when you posted your recommendation of him, Tiger. I better go out and buy a lottery ticket (of course in a non-USP’s name, should I win and have to give 38% of it to the IRS).
@bubblebustin,
Definitely buy that lottery ticket. You could put it in my name – although, I have not yet received the much awaited CLN. proving I am a NON US PERSON, I am hopeful it will be quite soon. I promise I will split the winnings with you.
@Tiger
I could split with you and still be up 12 points! Do you have ID that says Tiger? 🙂
@bubblebustin
I will look into getting new ID. And I never break my promises – I truly will split the winnings with you. Not sure how big the next Lotto is.
As a US person, and married to a non-US spouse, I have complied with the privacy-breaching FBAR demands by disclosing joint accounts with my unfortunate wife.
I have also interpreted the FBAR instructions to mean that my wife must sign with me on item 44 on the FBAR form.
This is because of my very simple-minded, now entirely mistaken, understanding of the instructions which say (see point #3 below) that:
“Certain Accounts Jointly Owned by Spouses. The spouse of an individual who files an FBAR is not required to file a separate FBAR if the following conditions are met: (1) all the financial accounts that the
non-filing spouse is required to report are jointly owned with the filing spouse; (2) the filing spouse reports the jointly owned accounts on a timely filed FBAR; and (3) both spouses sign the FBAR in Item 44.”
Because the new online FBAR form does not permit a second signature, I asked FBAR helpline and two different branches of FinCEN how I could include her signature on the new form (I will not go over lengthy details re process, consequences, or contradictory responses).
The “higher level” written response now received from FBAR is that there is no need for my wife to sign. Why? –Because, as a non-US person, she does not have to sign.
Apologies if this has been previously mentioned in the forum, and especially to my wife for my careless behaviour– however, the privacy breach (not considered as such by Canada OPC) still occurs each time I disclose a joint account even without her signature.
So.
It’s a nice May evening in Toronto. I have a busy job and two small children, a fixer-upper house and a garden, all of which have a claim on my attention. The garden especially, at the moment .
There are things I’d rather be doing than US taxes, templated off our Canadian taxes and professionally prepared US returns from previous years (our Canadian accountant has sensibly left the US tax business), especially since I don’t owe them any money and I renounced in March of last year. Last night I was working on my FBARs while my seven-year-old was cruising around the world on Google Earth on the next computer, and wanting to talk to me about it.
Now, are those the right priorities? Of course not. “It’s absurd to make your life absurd in response to absurd governments,” said Jane Jacobs, herself an ex-U.S. citizen.
– Plan A was to file a full-year return for last year, since it spares the fussy calculations around filing a 1040 for only the first eight weeks of last year, and a 1040NR for the rest of it. But, really, I’m tired, even at the finish line, of all this mindless chickensh*t.
– I have the five years (2007-11) that the 8854 asks for.
– What is the downside, in the real world, of just filing an 8854 by itself, to establish that I’m not a covered expatriate, and calling it done?
@broken man
If you are not over the filing limits based on income for the first 8 weeks of the year, I don’t see why a 1040 is necessary for that period. And if you don’t have any US source income for the remainder of the year, why file a 1040NR ? If neither are over the filing limits I can’t see why you shouldn’t just file the 8854 by itself.
@ Broken Man
I was going to file that 8854 until I actually read the form and discovered that they wanted a complete net worth statement right down to the used cars. Then something kind of just snapped and I decided I wasn’t going to file anything at all, ever, again. So covered, uncovered, recovered, whatever…I’ve had it with the “mindless chickenshit”. (I like that!) Screw ’em. I think I’ll go sailing tomorrow.
@abrokenman
yes, it was a beautiful night in Toronto. I can’t for the life of me figure out how to fill in my 1040NR. I renounced on Jan 20 2012. For the 1040 (and FUBAR), I prorated all the balances and added any income to me 14 days of work. I knew in dual status year, no 2555, 1116 and no standard deduction. The exemption is still allowed. So the 1040 is easy. I inherited money in late 2010. I didn’t want to move it before renouncing because I thought it would look like I was renouncing for tax reasons. So I had this IRA and annuity which I cashed out because I was so paranoid I would receive FUBAR penalties and that they would confiscate the money. So I have to file the 1040 NR and cannot figure out what rate of tax is supposed to show on the form. 10% was withheld and I asked for an extra 5% to be withheld (thinking that was the treaty rate). Looking for some way to establish that figure, the form for brining in the treaty threatens one with 877A. I could scream. I am thinking that income is an additional 10%, there is nothing to add to, so I should be getting a refund. But, no idea if that is correct or not. Does anyone else have any US income they have to show on 1040NR?
There is a fairly bizarre discussion of 1040/1040NR on serbinski:
http://forums.serbinski.com/viewtopic.php?t=7616&postdays=0&postorder=asc&start=0
The 8854 is even worse. I get that TFSA and RRSP count as trusts but no clue where to put any GIC’s that are not tied to such “trusts.” I am splitting any cash accounts jointly held with my non-US spouse, including the house. Is that what you guys are doing?
For the 8854 – I’m really only filing it to establish that I’m an uncovered expatriate (dual from birth exception plus assets below the threshold). I really only filed the five years of returns to be able to say that I had on the 8854.* 5.x years seems unnecessary.
I’m also not stressing about what columns to put assets in – as many people have pointed out, it’s not as if the IRS gives any useful explanation of what they want, let alone why.
Basically I’m putting the combined value of the RRSP, etc. in US dollars in one box and a ballpark valuation of the house** /2 and calling it good.
* I still wonder about the Out in a Blaze of Glory strategy for people with assets below the threshold, in which the only piece of US tax paperwork filed is the 8854.
** Ontario’s property tax assessment system, in which house values are somewhat lowballed to make the valuations hard to appeal, in this case works to your advantage.
@a broken man
Thanks. It sounds about right and the MPAC assessments do offer relief. Though like you, I am way below that $2mn.
I meant the $651,000 limit, but yes.
About that 8854-can it be filed as soon as the CLN is received? And then the part-year return for 2013 can go in when the 2014 forms are available?
@allou,
Why give them anything a year early that will further confuse them? Your 8854 will be for information as of the day before your renunciation and to be filed with your 2013 return. Although, I fully understand the emotional relief you would gain by having that form taken care of. You could have the information all ready to plug into the 8854 form for 2013 when that is available, toward the end of 2013 (will there be any changes from the form for 2012?) — to be filed in 2014 for and with your partial year 2013 1040 tax return.
A note from James Jatras…
Hi All
I have received a request from Bailey Reutzel, a reporter from http://www.paymentssource.com/ (Payments Source, which is connected to American Banker). She interviewed me about what’s wrong with FATCA, why it should be repealed, etc. She also wants to talk with a couple of expats who have been bitten by FATCA (see her note to me below).
Please let me know if you are interested or can refer me to someone who is, and I’ll put you in touch.
Best
Jim
Jim
I’d like to speak with someone who’s bank dropped their account, then had to move to a different bank to have the same thing happen. I’d like someone who’s had to play a type of “musical chairs” with their banks. I don’t necessarily care what country they’re living in, but I also think having a family might be interesting as well, or I guess it would be harder for them without a bank account.
Let me know if you can get a couple people lined up for me to chat with!
Thanks so much… Talk to you soon.
Bailey Reutzel
Jim can be reached at…James George Jatras
email address: jim@globalstrategicpr.com
Reminder on FBAR Filing for 2012 Year – Must be Received by June 28, 2012 (6/2/13)
http://federaltaxcrimes.blogspot.com/2013/06/reminder-on-fbar-filing-for-2012-year.html
H&R Block Offers Remote Tax Prep for Expatriates
H&R Block has introduced a remote service for U.S. citizens living abroad that will help them meet their often confusing tax-filing obligations.
The Kansas City, Mo.-based tax prep giant estimates that there are more than 6 million expatriates, and that many of them will need help to meet the June 17 filing deadline
@Just Me
I just about fell off my chair when I read H & R’s claims that their “remote service makes the whole process painless” for dual residents living in other countries. I love to quote Roger Conklin when anyone says it’s easy: if you think doing taxes from abroad is easy, you must be doing something wrong.
I suspect for many of us, having H & R Block do our taxes would be like having our GP treat us for cancer.
…and the term ‘dual resident’ as applied to a USP abroad wrong, as you can’t be a resident of the US while residing abroad.
@Allou: About that 8854-can it be filed as soon as the CLN is received?
Not any more. Before HEART (2008) it was vital to file it immediately on renouncing, because until that was done you remained a US citizen ‘for tax purposes’ even though not for any other ‘purposes’. HEART got rid of that trap though, and now you just file it along with your normal year-end 1040 and/or 1040nr. There’s no benefit to doing it any earlier, and no cost to waiting. In any case, you may have to wait for the IRS to produce the right year’s 8854 form.
…or does the US consider us residents of the US even though we live abroad, as I believe I’ve read here on Brock?
@bubblebusting…
In keeping with international terminology on ‘tax residence”, the IRS designates US persons living abroad as being “tax resident” in the US even thought they are not living there. Residency in this case does not mean residency. It is the technocrats bizzaro world where words mean the opposite of what they normally mean. Up is down, left is right, and resident is non resident!