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thanks @Just Me
Just Me, thanks. The letter I got back was actually addressed to the Royal Bank. The only connection to me was the account number. I assuming this will put me on the ‘list of US persons’ when FATCA hits. I need that CLN as soon as possible…
Under what authority would the IRS solicit information from a foreign bank directly? Would a Canadian bank have the authority under Canadian law to respond directly to requests for information concerning a Canadian resident from a foreign (i.e. USA) government rather than via the information sharing provisions per bilateral conventions?
@oohlala
At this time, they don’t have the authority. This is what they are trying to achieve through FATCA and what we here are opposing. Five European countries have agreed to a ‘government to government’ reporting. The Canadian government has not yet agreed to anything. And therefore, Canadian banks, as yet have no authority to report any information to the IRS. This is what we are fighting to prevent.
I added thins link in my previous post, maybe that can shed some light on the subject.
http://www.irs.gov/businesses
I think you are over reacting here. It’s a simple mis- communication
You used 3520A for a TFSA which you subsequently closed.
Some lowly clerk at IRS had no idea what to do with it. He/she had never heard of a TFSA. He/she presumed RBC was the administrator of some sort of trust and assumed RBC should be identified with number of some sort-hence the request to them for a EIN.
RBC got their request, said ‘WTF is this all about?” and sent it to you. No big deal.
@itacaf
I got the same letter sent through TD. It was sent there because TD is considered the trustee. The IRS assigned an EIN to the trust (tfsa account) NOT the institution. The trust is an entity. I called the office in Philadelphia that issues EINs and they looked up the number and it was assigned to my account not to TD. There is nothing for you to do, just use the number if you need to in the future. There is some discussion of this on the Serbinski forum.
@iamquincy
Thanks for your comments. I’ve already filed the form and will leave it at that.
FWIW the FBAR processing centre in Detroit has gotten to my FBARs, filed in October of last year.
(Sites like this are confidence-building – back then I would have hit the ceiling if I’d got mail from something calling itself the ‘Financial Crimes Enforcement Network’, but no more.)
Now. I filed my FBARs before the notice came out about ‘reasonable cause letters,’ and the IRS now wants one. Is there a sample I could template off?
@broken man
Here is my letter. I don’t know if it did the trick since I only sent my FBARs in January. Hope it helps.
Please find enclosed my FBARs for 2006-2010..
I recently became aware through media reports that I am required to file US taxes and FBARs due to my birth in the United States. I have therefore prepared the required reports. As I am fulfilling my reporting obligations, expeditiously upon recognizing them, I trust that I will be treated accordingly, as per the examples given in IRS notice FS-2011-13 “Information for US citizens or Dual Citizens Residing Outside the US”. I believe I meet the definition of reasonable cause and am requesting the waiver of any potential penalties for the following reasons:
• My family moved to Canada when I was a child (in 19xxx) and I became a Canadian citizen in 19xx.
• I believed that I had relinquished my US citizenship in 19xx, when I obtained Canadian citizenship.
• I have been completely compliant with the Canadian Revenue Agency (CRA) and have properly reported all of my income to the CRA.
• To enable me to be compliant with IRS, I have recently filed tax returns for years 2006-2010, reporting all income and resulting in no tax owing.
• All of my bank accounts in Canada have been for legitimate purposes and not for concealing income.
• On (date), I appeared before the Vice Consul of the American Consulate in Toronto and formally relinquished my US citizenship. I am now awaiting my Certificate of Loss of Nationality from the State Department.
I hope that this submission, together with my soon to be filed 2011 return, satisfies my obligations to the US as I seek to conclude any residual tax/financial reporting obligations.
@A broken man on a Halifax pier
Can you let us kniow exactly what their letter said?
Not sure if anyone will be able to help me on this one, but I can’t find the relevant info elsewhere, so here goes. Thanks in advance for any pointers.
I am an American citizen, married to a Korean citizen and living in Seoul for the past ten years. We’re planning to move back to the States this summer. I’m up-to-date on filing all my income tax returns but only this week became aware of FBAR. I’d like to get myself into compliance, but wonder about the best way to do so. A few facts:
* I have only a few hundred dollars in my bank accounts in Korea. The great bulk of our money is in accounts belonging to my wife (as said, an ROK citizen), over which I have no signature authority. Must I declare these accounts, even though a large amount of the money therein is not mine and belongs to a foreign resident?
* The greatest majority of our money is tied up in the Korean “key money” system (jeans) on our apartment. For the unfamiliar, in Korea, renters typically pay an up-front, lump-sum deposit (in our case, about $110,000) in exchange for a two-year, rent-free lease on the apartment. When we move out, the deposit will be refunded to us. Thus, while we have an agreement to get this money back, it’s not technically ours at the moment. However, we will be receiving this money again before we move to the USA. How, if at all, do I declare this on the FBAR?
* For how many years, if any, must I retroactively file FBAR forms? Should I be using Form 8938 or Form TD F 90-22.1? Both? Neither?
Again, thanks for any info you can offer. I’m a bit bewildered at the moment.
A.
Hi Aaron
I am just a random person on the internet and you should not take my advice as Truth. However, if the accounts are not in your name, you have no signature authority and the money is not technically yours at the moment, then it does not sound like you had an FBAR filing requirement. If the deposit is refunded to you this year then you will have a filing requirement for next year. The FBAR is for financial accounts > $10,000. The 8938 is for financial “assets” > $50,000. If you get $110,000 back then I think you will have to file both forms, but I am not totally sure how the 8938 works.
@Aaron,
I agree with rodgrod as long as your wife is not a green card holder. If you live abroad, you don’t need to file 8938 unless the balance of the financial account is over $200,000 on Dec. 31 or over $300,000 during the year. The $50,000 threshold is for resident Americans. So be careful when you move back to the US if you still have that $110,000 in Korea. If your wife gets a green card, then I’m pretty sure she will have to report on both forms.
Thanks for those replies. My only other question, which may too far afield for this forum:
If/when we move back to the States, can my wife wire that money from HER Korean account to MY account in the USA without incurring any tax liabilities? Will this necessitate any FBAR activities?
Anon –
Get some solid qualified advice before you make any moves on this task. Three loose suggestions. (1) Take a good look at the pros and cons of keeping separate assets distinct and separate, or at least well defined on the accounting side. (2) Look into alternatives to wire transfer (e.g., personal transport of a declared instrument). Money flying through the aether can get hung in a frustrating limbo where you have no handles, especially if you are doing this on a one-time basis. (3) Find out how transitional FBAR works. As soon as your wife becomes some sort of “US person” she probably becomes subject to FBAR. Unless you transit on the stroke of midnight on New Year’s Eve, and she also acquires status on that same stroke, it seems likely that she will have a piece of a year where FBAR must be reported.
USXCanada: Thanks for the pointers!
Gosh, being an American is such a joy at times…
This website will bring you to an excellent and very informative article on FBAR matters:
http://www.aicpa.org/publications/taxadviser/2012/may/pages/hibschweiler_may12.aspx
thank you @jacquie, that is an excellent resource on FBARs and related issues (ex. OVDs) – and illuminating the roles of tax professionals as well.
I am hoping someone can help me out with this;
I am a US Citizen by birth having lived in Canada for my entire life and am going through the hoops to renounce my US Citizenship. I DO NOT meet the requirements which would hit me with the Expatriation Tax. Currently, I am trying to file backwards for 5-6 years to become compliant with the IRS so that I may renounce following the rules. Does this mean I have to file FBAR’s for each of these years as well?
Basically, what I want to know is whether backfiling of FBAR’s are required to renounce US Citizenship or are my tax returns plenty? By backfiling FBAR’s I feel that I expose myself to penalties which for a small fish like myself ($50,000 net worth) would be devastating. I hope someone can advise me properly!
Thank you,
Big Almond
@Big Almond
Well, the sad truth is, yes, if you are determined that you have to file those 5 years of back tax returns, than that is what you are supposed to do also. You would want to attach a “reasonable cause” letter about why you haven’t done this before, and then hope for the best. However... There is more to consider here.
Essentially you are doing is a Quiet Disclosure by these actions, and you probably should read and digest your options on this most current thread about Quiet Disclosures. You will see attorneys disagreeing about best courses of action. After you read it all, I would recommend the very last posting with a paper by Jack Townsend. Download and take your time to mull this over before you decide.
Don’t be in a hurry to expose yourself. If your facts are that you have been in Canada for your entire life, done nothing to show active US citizenship like vote or worked in America, why should you have to do anything, is a good question? What makes you a US citizen in the first place. Just birth long ago? Don’t be in a rush here until you have really thought it through carefully. Not knowing all your facts, it is hard to advise, but I trust you have read the ENTIRE relinquish or renounce thread, right? There are some real Canadian experts there that can advise better than me.
Good luck, and don’t be in a hurry. You are not under any imposed deadline right now.
@big almond Your net worth is not really sufficient for the IRS to be overly concerned about. One thing is clear: FBAR compliance is not needed for expatriation. But the tax forms may provide sufficient information to the IRS to show that you have not filed an FBAR when you should have. That is why I personally have filed Fifth Amendment 8854 and a Fifth Amendment 1040 for 2011. The Fifth Amendment is appropriate because of the substantial hazard of filing belated FBARs.
Foreign banks are not required to report to the IRS accounts less than $50,000, there is not yet a need to worry about your bank accounts from the stand point that the IRS is going to find out about them because of FATCA.
@Just Me. Thank you for taking the time to provide me with some informative information.
Unfortunately, I am working in the US for one year which is for further studies. I am not sure whether this creates a unique situation for me, but it certainly creates a situation where I will have to file taxes for at least one year under the US which will certainly open them up to me at some point.
@Petros
Just curious, after reading a few of your linked posts, have you relinquished your citizenship? I am afraid of the penalties they could apply to me, which would essentially render me bankrupt. I could go on and on about how unjust this entire process is, but in the end I just want to rid myself of the “land of the free” (pun intended).
Has anyone who has done a QD that is a minnow/bacterium like myself been nailed with penalties thus far?
I have relinquished my citizenship. As far as I know, no one has received penalties who has done a Quiet Disclosure or a Noisy Disclosure. But this is based on a lack of anecdotal evidence; the lawyers who follow this blog would have a better idea. Certainly, I’ve never heard of anyone of 50K net worth, outside of the OVDI, who has received penalties. Not one person outside the OVDI. Inside the OVDI, there is Late Loyalist (who had roughly 30K in bank accounts).