US Citizen Reporting 800K Baht In Thai Bank

[JetsetBkk]

A US citizen friend of mine says he uses the 65K Baht/month pension method of proving his finances for extending his visa each year.

He says he doesn't put 800K in a Thai bank because he has to report any funds over $10,000 deposited in a foreign bank.

One of the requirements for Immigration is a years worth of bank statements showing the monthly deposits, which is only available from head office in Bangkok and takes a week to obtain, so timing is important.

Can any US retiree shed light on this US government requirement and its ramifications, e.g. does it produce a tax liability?

 

[asiaexpat]

All US citizens and legal residents must report any foreign financial arrangement (bank accounts included) to the US Treasury. There is a web site to do this FBAR reporting and it is due every June. I have never had any negative ramifications from making this report.

[tonray]

9 minutes ago, JetsetBkk said:

Can any US retiree shed light on this US government requirement and its ramifications, e.g. does it produce a tax liability?

Nothing to do with taxes....it's for tracking money launderers and terrorists. But if you miss reporting....big hefty fines can be levied....so don't forget to do it. Takes 5 minutes online

[EricTh]

16 minutes ago, tonray said:

Nothing to do with taxes....it's for tracking money launderers and terrorists. But if you miss reporting....big hefty fines can be levied....so don't forget to do it. Takes 5 minutes online

Do the Thai banks report the bank balance to US govt tax department when requested by them?

[JetsetBkk]

31 minutes ago, tonray said:

if you miss reporting....big hefty fines can be levied

He's never done it and the posibility of big hefty fines is keeping him from starting.

[tonray]

38 minutes ago, JetsetBkk said:

He's never done it and the posibility of big hefty fines is keeping him from starting.

I'm sure a lot of people use that line after being caught.

[tonray]

54 minutes ago, EricTh said:

Do the Thai banks report the bank balance to US govt tax department when requested by them?

I seem to remember having to sign US IRS forms when I opened my accounts here..my guess is you give the permission in those forms for US to access your info.

[zzzzz]

58 minutes ago, JetsetBkk said:

He's never done it and the posibility of big hefty fines is keeping him from starting.

I've also never done FBAR and wont start doing it now cause would incur fines

figure, wrongly or correctly, why rock the boat?

I have seen a bunch of sites that will "assist" you in filing if you have "forgotten" to but there not cheap

AFAIK only Bangkok bank reports to the us.

 

 

Quote

Filing an FBAR late or not at all is a violation and may subject you to penalties (see Penalties above). If you have not been contacted by IRS about a late FBAR and are not under civil or criminal investigation by IRS, you may file late FBARs and, to keep potential penalties to a minimum, should do so as soon as possible.  To keep potential penalties to a minimum, you should file late FBARs as soon as possible.

Quote

 

The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

FBARs will not be automatically subject to audit but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns.

 

as i no longer file my 1040 (i make under the required amount to file)
i am not really worried

Edited May 21, 2020 by zzzzz

[JetsetBkk]

1 hour ago, zzzzz said:

I've also never done FBAR and wont start doing it now cause would incur fines

figure, wrongly or correctly, why rock the boat?

I have seen a bunch of sites that will "assist" you in filing if you have "forgotten" to but there not cheap

AFAIK only Bangkok bank reports to the us.

I think the boat-rocking is my friend's attitude too.

However, I believe he banks with Bangkok bank so I'd better give him a link to this thread.

Edited May 21, 2020 by JetsetBkk

[JackThompson]

2 hours ago, JetsetBkk said:

He's never done it and the posibility of big hefty fines is keeping him from starting.

Wise move.  Losing one's passport due to some issue like that would be a real life-wrecker.  I keep my money in the USA to avoid this requirement - but more importantly, because I "have rights" in the USA, and FDIC insurance on my accounts.  

I am not saying there is anything 'wrong' with Thai banks; I am no expert, which is the problem - what I know, is that I just don't know.  But I do remember the "great" AAA ratings of those Southern-European bonds, just before they were devalued to "junk" status. 

If something went sideways in Thailand, what are the odds I'd get a fair shake here?  Look how the Thais were messed-around for months for their 5K baht in an emergency, and imagine how foreigners would be treated. 

The best rule, which I've often seen repeated here, is "Don't invest anything in Thailand you cannot afford to lose."

[Pib]

OP, the requirement to show Bt800K in the bank or a Bt65K/month transferred to obtain renewal of person's extension of stay is a Thai Immigration/government requirement; not US govt requirement.

 

A U.S. person only needs to submit an annual FBAR if having over $10K in a foreign bank at any point during the year....even for a minute.  But your friend does not do that.

 

For him to transfer Bt65K/month will not create any tax liability for him by the US govt or Thai govt with the exception of reporting interest earned on his tax return if his income is enough to require a tax return.  And since he's not keeping more than $10K in Thailand no annual FBAR is required.

[pmarlin]

2 hours ago, tonray said:

I seem to remember having to sign US IRS forms when I opened my accounts here..my guess is you give the permission in those forms for US to access your info.

I did the same. I think it was a W-7 form. Think backs have to report US account holders who have more than $50,000

[BigStar]

42 minutes ago, JetsetBkk said:

I think the boat-rocking is my friend's attitude too.

However, I believe he banks with Bangkok bank so I'd better give him a link to this thread.

It may be that thru FATCA reporting by the banks his lack of FBARs will eventually catch up with him. The more he's failed to file, the greater penalty will likely be. His only hope is that he doesn't have enough in Thai banks to cause much notice. 

[BigStar]

17 minutes ago, JackThompson said:

The best rule, which I've often seen repeated here, is "Don't invest anything in Thailand you cannot afford to lose."

That's only one of the three sage, street-smart TVF Primal Laws for survival in Thailand. You may want to take note of the other two before it's too late:

 

1. Never invest in anything you aren't ready to lose;

2. Never own more than you can carry with you;

3. Keep a suitcase packed at all times.

 

 

[86Tiger]

1 hour ago, Pib said:

OP, the requirement to show Bt800K in the bank or a Bt65K/month transferred to obtain renewal of person's extension of stay is a Thai Immigration/government requirement; not US govt requirement.

 

A U.S. person only needs to submit an annual FBAR if having over $10K in a foreign bank at any point during the year....even for a minute.  But your friend does not do that.

 

For him to transfer Bt65K/month will not create any tax liability for him by the US govt or Thai govt with the exception of reporting interest earned on his tax return if his income is enough to require a tax return.  And since he's not keeping more than $10K in Thailand no annual FBAR is required.

This is the correct answer.

 

It is a rule to "fight terrorism."  If any overseas account exceeds $10k go on line and make report, it takes 5 minute or less.  They are only looking for unaccountable funds i.e. you don't have record where it originates.  As long as it is a transfer from US no worries.  And if account never crosses the $10k barrier no worries, forget bout it.

[JimGant]

Several things are coming together with this international exchange of banking data (FATCA and CRS for Europe). First, for Yanks (FATCA), if you've opened a bank account in the last 5 years, or so, you've been asked to identify yourself as a "US person." But Thai banks don't have to report anything re FATCA if the aggregate of your bank accounts doesn't exceed $50,000 at any time during the year, or at the end of the year. But, if banks find it too difficult to determine aggregates for certain time blocks, and what exchange rate to use, etc -- they might (and many international banks have) find it easier just to report earnings for everyone with a US social security number in their data bank. Whether Thailand banks do this, I don't know -- but I would conclude, as it probably makes things easier for them, that they do. So, assume that your measly interest on your Thai bank account(s) is now just another 1099 for the IRS to track your taxable income reporting integrity. THUS! -- better file the required Schedule B ('cause you now have foreign earned interest), and note where on this schedule they ask if you had a foreign account(s) that required you to file a FBAR. If you answer "yes," I guess you better have filed a FBAR. If "no," then the interest reported should be low enough not to indicate you didn't have a substantial principal earning interest.

 

Anyway, my best shot is that, if you've been reporting your Thai interest on Schedule B, but not filing a FBAR (and should have), then begin filing a FBAR, but don't worry about filing delinquent ones.

 

If you haven't been reporting Thai bank interest on Sched B (but have filed that simple 5 minute FBAR, which doesn't cost you anything), then best start declaring that interest on Sched B -- 'cause there's nothing easier in IRS software than to search for non declared 1099 income, which now probably includes, in substance, FATCA reported income.

 

If you haven't filed a Sched B, or a FBAR -- but should have -- you're probably ok for delinquent filings, as Treasury, and its IRS, don't have the resources to chase small fry. But, start filing current ones soonest, as it's likely they won't trip a "why didn't you file previously" question. But, you may want to take up drinking..... ????

[Sheryl]

It is a simple report that can be done online. I do it every year. Takes just a few minutes.

 

The only possible tax liability it might create is for the interest income, but one is not required to file taxes if none are owed and the interest on 800k in a Thai bank alone is not likely to put someone over the taxable income threshold if not already there.

[JimGant]

Actually, if you have been reporting your Thai interest income via Sched B, you might consider filing delinquent FBARs, at least according to this, albeit old, Forbes article:

https://www.forbes.com/sites/stephendunn/2014/07/20/all-you-need-to-do-is-file-your-delinquent-fbars/#24924c04169a

[lopburi3]

1.  The requirement to file FBAR is if total value of all your foreign accounts was greater than $10,000 on any day of the year.

2.  It has nothing to do with tax obligations.

3.  All Thai banks accepting account for Americans should be reporting now.  

4.  As said late filing has not been an issue for normal people - it is designed to be used against organized crime when they can not find other charges.

[connda]

If you have an account in excess of 10K USD you need to fill out a PDF form listing your bank account details and the highest amount in the bank during the calendar year, and send it to the US Treasury once a year.  Takes a few minutes.

https://bsaefiling.fincen.treas.gov/main.html

[lopburi3]

1 minute ago, connda said:

an account in excess of 10K USD

Again and very important - it is the total value of 10k - not individual accounts being 10k.

Quote

must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

 

[soisanuk]

25 minutes ago, 86Tiger said:

This is the correct answer.

 

It is a rule to "fight terrorism."  If any overseas account exceeds $10k go on line and make report, it takes 5 minute or less.  They are only looking for unaccountable funds i.e. you don't have record where it originates.  As long as it is a transfer from US no worries.  And if account never crosses the $10k barrier no worries, forget bout it.

There are two separate US laws at play if you are a US Citizen/resident. One FBAR relates to foreign bank accounts only, whereas the other required by FACTA relates to foreign financial assets, e.g., stocks, bonds, bank accounts, etc.

 

FBAR - This report is sent to the Financial Crimes Enforcement Network (FINCEN) - a part of the US Treasury Dept, but it is not the IRS. The FBAR is required by US Money laundering law and is required only if a US Citizen/resident has one or more foreign bank accounts that any time during the calendar year had more than the equivalent of US$10,000 on deposit (aggregate amount, e.g., if you have US$5,001 in a Thai bank and US$5,000 in a Singapore bank, on one or more days during the year, the report is required. It is filed electronically online with FINCEN -  https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html - it used to be due on June 15 and no extensions permitted, but that was changed to April 15 and extension up to 6 months permitted. However, for the 2019 calendar year, an automatic extension to October 15 has been granted - https://www.fincen.gov/sites/default/files/2020-03/Due_Date_for_FBARs.pdf.

 

FACTA - This law does relate to US income taxes and provided the US citizen/resident has foreign financial assets in excess of certain thresholds - for a single person it is currently US$50,000 unless they are a resident outside the US, in which case it is US$200,000. If the threshold is met, then a a separate form is prepared and included with their US income Tax return.  If I recall correctly, if the person is not required to file a US income tax return, then there is no requirement to file the form.  Additionally, this law requires foreign financial institutions to report on accounts held by US citizens/residents - the current threshold is, I believe, the equivalent of more than US$50,000 on deposit at the end of the calendar year.  Previously, Bangkok Bank and some other Thai banks had entered into agreements with the IRS for this reporting, BUT that changed and the obligation to report was taken over by the Bank of Thailand pursuant to a later agreement between the IRS and the Government of Thailand.

 

 

[JackThompson]

2 hours ago, BigStar said:

That's only one of the three sage, street-smart TVF Primal Laws for survival in Thailand. You may want to take note of the other two before it's too late:

 

1. Never invest in anything you aren't ready to lose;

2. Never own more than you can carry with you;

3. Keep a suitcase packed at all times.

I definitely broke #2, but the replacement-cost of my less-portable "stuff" is not close to a fraction the money needed "in the bank" by immigration - no cars, etc. 

Number 3 would take a couple hours, forgoing the "stuff" in #2.

[topt]

2 hours ago, JackThompson said:

I definitely broke #2, but the replacement-cost of my less-portable "stuff" is not close to a fraction the money needed "in the bank" by immigration - no cars, etc. 

Number 3 would take a couple hours, forgoing the "stuff" in #2.

I think (I hope....) that his comments were a little tongue in cheek......... 

[Presnock]

I have been filing the FBAR for many years now.  The requirement not only say $10,000 it indicates that is also AGGREGATE totalling more that $10,000 in any year so the 65,000 baht 12 times would equal more than the $10,000 aggregate thus meaning one must file a FBAR.  It is free, online and takes maybe 10 minutes.  Thai banks are part of I think 54 countries participating in the law about money laundering which is where the FBAR comes in as it goes to the Justice Depat.   Whenever one files a 1040 for taxes if one does, it also requires one to input the country in which one holds a foreign bank acct.  I blv the IRS and Justice dept might share this info.  I know when I got my Bangkok Bank acct they needed my passport and Social security number so they could report my Thai banking info to the US.  One can google FBAR and find out all the information necessary including who, when, what, where etc.  It is best to be sure when dealing with laws as it could come back and bite you on the butt if you ignore it as the US govt isn't known to be very forgiving when it comes to taxes and crimes.

[dlclark97]

One poster commented the FBAR report had to be filed by end of June.  As of the 2019 report the filing date coincides with the IRS income tax due date of 15 April.  The date due for the FBAR is not extended beyond that date as with your tax return.  Also, as said the report can be done in five (maybe ten) minutes on line and has nothing to do with any taxation. It is related to financial crimes activities only.  The amount required to be reported is the peak value of the account(s) during the year in USD.  Add these amounts for multiple accounts and use the official exchange rate from https://www.fiscal.treasury.gov/reports-statements/treasury-reporting-rates-exchange/current.html to convert Thai baht to USD.  There is no connection or impact on your income tax liability but as has been said there can be extremely heavy fines for failing to report.  Make sure you go to the official government site at site https://bsaefiling.fincen.treas.gov/main.html to file this report on line.  There are many offers available at a high cost to do this report for you but you can easily do the report yourself.

Edited May 21, 2020 by dlclark97
add comment

[dlclark97]

The interest earned in a Thai bank account has nothing to do with this report.  The only values cared about is the peak value during the calendar year of any account(s) you have in a foreign bank.

[flexomike]

20 minutes ago, Presnock said:

I have been filing the FBAR for many years now.  The requirement not only say $10,000 it indicates that is also AGGREGATE totalling more that $10,000 in any year so the 65,000 baht 12 times would equal more than the $10,000 aggregate thus meaning one must file a FBAR.  It is free, online and takes maybe 10 minutes.  Thai banks are part of I think 54 countries participating in the law about money laundering which is where the FBAR comes in as it goes to the Justice Depat.   Whenever one files a 1040 for taxes if one does, it also requires one to input the country in which one holds a foreign bank acct.  I blv the IRS and Justice dept might share this info.  I know when I got my Bangkok Bank acct they needed my passport and Social security number so they could report my Thai banking info to the US.  One can google FBAR and find out all the information necessary including who, when, what, where etc.  It is best to be sure when dealing with laws as it could come back and bite you on the butt if you ignore it as the US govt isn't known to be very forgiving when it comes to taxes and crimes.

That is wrong on the 65000 baht, aggregate is a combination of all accounts at one time that exceed $10,000 if you never have that amount you do not need to report, if you are using the 800,000 for extensions than for sure you will have to do a report, no big deal takes five minutes

 

[lopburi3]

41 minutes ago, Presnock said:

so the 65,000 baht 12 times would equal more than the $10,000 aggregate thus meaning one must file a FBAR. 

No it would not - it is account balance on a single day (for all accounts) being over $10,000 value that keys requirement for FBAR report.  Nothing to do with money transfers or spending - only the total amount in accounts at a specific time.

 

Edit:  Oops sorry - did not notice above post was a quote with correct answer.  

Edited May 21, 2020 by lopburi3

[Pib]

50 minutes ago, Presnock said:

I have been filing the FBAR for many years now.  The requirement not only say $10,000 it indicates that is also AGGREGATE totalling more that $10,000 in any year so the 65,000 baht 12 times would equal more than the $10,000 aggregate thus meaning one must file a FBAR. 

Wrong as others have already said.

 

 "Aggregate" for FBAR purposes means for all foreign financial account at any moment in time during the year.   Say you had two Thai bank accts and neither exceeded $5K (dollars or baht equivalent) on the same day/point in time which is $10K total---no FBAR required.  But say on the same day one acct had $5,000 and one $5,001 which totals $10,001--you have now exceeded $10K...you must file a FBAR.  

 

You could be transferring over exactly $10K every month and as long as your withdrew/spent all of it from your Thai bank acct (i.e., getting it down to zero) before the next $10K arrived at no point in time have you exceeded $10K in foreign financial accts assuming you didn't have any other foreign financial accts in the world.   

 

And to determine exchange rate to convert baht to dollars to determine if you need to file a FBAR, use the US Treasury exchange rate as described in the second snapshot below from the FBAR instructions.

 

See below from the FBAR Instructions.