US Citizens: Retirement Visas & FBAR Reporting

[bangkokgalaxy]

Has anyone had to deal with this when keeping 800k in a Thai bank, or when using visa agents for financial requirements? 

 

[Jingthing]

Yes of course. 

It's strictly required.

The penalties for non compliance are massive. 

The filing is quick and easy.

I have a legitimate 800k account. 

I don't know about the details of the dodgy games the agents play so I can't speak to FBAR related to that but it's an interesting question. 

[kokesaat]

If you have $10,000 in Thai banks....one account or many, at any point during the year, even for a day, you are required to do the fbar.  It's simple to do onlinr

[ubonjoe]

Not directly visa or extensions related. Moved to the Home Country forum where FBAR has been discussed before.

[Jingthing]

4 hours ago, kokesaat said:

If you have $10,000 in Thai banks....one account or many, at any point during the year, even for a day, you are required to do the fbar.  It's simple to do onlinr

Yes.

For example 8000 in one and 2000 in another. 

But the agent question is a different angle.

Is the money really in the expats account?

Do the participating banks actually regard these temporary accounts as real accounts that they would ever report to the US treasury?

I've never heard of an expat using agents that doesn't actually have the money filing an FBAR.

Maybe they should. I don’t know. 

Edited October 27, 2020 by Jingthing

[Pib]

If a person exceeds $10K in a foreign acct(s) at any time during the year....one millisecond, one hour, one day, etc....he must submit a FBAR.  It's U.S Federal law. 

 

As I have been using retirement/marriage extensions of stay using the Bt800K/Bt400K Thai bank deposit(s) method for the last dozen year plus I keep extra money for emergency purposes I've been submitting a FBAR for the last dozen years. 

 

Simple....not hard at all....download the FBAR PDF form....fill it out offline....then click the embedded icons in the PDF form and it will take you right to the FBAR site to upload the completed form.   After upload you'll immediately get a confirmation of upload/receipt...and a few days later another confirmation of acceptance with a control number.  You are done for another year.

 

Quote

If the maximum account value of a single account or aggregate of the maximum account values of multiple accounts exceeds $10,000, an FBAR must be filed. An FBAR is not required to be filed if the person did not have $10,000 of maximum value or aggregate maximum value in foreign financial accounts at any time during the calendar year.

 

[zlodnick]

Filing the fbar is simple for me, but the wife doesn't use the computer so that would be a problem when I'm no longer around.  This year, she closed a fixed account and withdrew all but $9,000 from a savings account. When we need money, she just calls our US bank to make a transfer to her savings account here, always making sure there will be less than $10k in the account.

 It's a bit of a pain and we're losing out on some interest, but I don't see any other way. It pizzes me off because we do everything by the book and I feel we're being penalized for it.

 

I don't even want to get started on the trouble we had with the Patriot Act!

[soisanuk]

8 hours ago, kokesaat said:

If you have $10,000 in Thai banks....one account or many, at any point during the year, even for a day, you are required to do the fbar.  It's simple to do onlinr

Actually, it is any amount greater than $10,000, e.g., $10,000.01, in one or more foreign banks at anytime during the calendar year (country doesn't matter, e.g. a portion can be in a Thai bank, a portion in a Singapore bank, etc.). 

 

As mentioned, the report is easy to file online. Normally, it is due by April 15, but this year it was extended to October 15.  The penalties for not filing can be as mentioned severe.  Anytime I meet the threshold (I use income method for my extensions, but sometimes as happened in 2019 for me, I have need for more for other things, thus exceeding the equivalent of $10,000) - I filed online using the fill in form while online rather than downloading and completing the pdf file - either method works.

 

Although the FBAR is filed with the US Treasury, it is to their Financial Crimes Enforcement Network (FinCen) rather than the Internal Revenue Service.

 

[bangkokgalaxy]

The remaining question is what happens when people use agents. Does anyone have first-hand experience with FBAR after using an agent?  Are their tax implications?

Edited October 27, 2020 by bangkokgalaxy

[DFPhuket]

Starting a few years ago, if you opened a new Thai bank account as a US citizen, the bank asked you to complete IRS forms so they are in compliance with FATCA. That is why some banks are more reticent to open accounts for Americans. The forms are all in English and require things like your social security number. 

 

In the case of using an agent, if the bank hasn't included a US citizen's social security number to the (temporary) account, I don't see how the IRS could track you as the owner or how it could impact FBAR. I assume the agent doesn't actually transfer 800,000 into the account of a US citizen?

 

It's an interesting question. 

[RocketDog]

18 hours ago, Jingthing said:

Yes of course. 

It's strictly required.

The penalties for non compliance are massive. 

The filing is quick and easy.

I have a legitimate 800k account. 

I don't know about the details of the dodgy games the agents play so I can't speak to FBAR related to that but it's an interesting question. 

Agreed, if I remember correctly the FBAR is for any account over $10,000 in a foreign bank and 800k certainly is. 

[RocketDog]

11 hours ago, Jingthing said:

Yes.

For example 8000 in one and 2000 in another. 

But the agent question is a different angle.

Is the money really in the expats account?

Do the participating banks actually regard these temporary accounts as real accounts that they would ever report to the US treasury?

I've never heard of an expat using agents that doesn't actually have the money filing an FBAR.

Maybe they should. I don’t know. 

Agreed again. Just another risk of using questionable agents. You could get deported from Thailand right into the hands of federal agents who meet you at the airport in America. 

 

I know the immigration law, follow it to the (constantly changing) letter, and file all my own documents in person. Just the cost of living in the Kingdom. Their rules, their game. Tricking the tricksters is a dangerous game. 

[Presnock]

to US citizens - re filing 1040 tax form, FBAR etc.  If you are a US citizen you are required to file tax forms if you make any money during the year.  Maybe under certain amounts or age you might get away with it.  But, the FBAR is done in conjunction with 54 other countries I read and actually goes to the Dept of Justice in the US.  When you file the 1040, there is one line you are required to fill out asking if you have a foreign bank account and in which country.  Thailand is also a signatory to this international banking law I heard that is trying to get rid of money laundering and/or tax non-filers.  Either way if you lie on the tax form saying you have no foreign bank acct when you do then you could be in trouble with the law.  If your foreign bank account has over $10,000.00 USD at any time (aggregate too) then the Thai bank is required to file a report to the US treasury/Justice dept. The forms are easy to file on line and unless you have some wild banking/US tax practices, then you should have no problem.  The laws are easy to find on line if one doubts what I have written.  I try to keep up with any changes as it is easier to follow the law guidelines vs any problems in the future!

 

[TallGuyJohninBKK]

The FBAR deadline -- JUST for the current 2020 year only -- has been extended by the government until Oct. 31... So there's still a couple days remaining to file for this year, for anyone who's required but hasn't.

 

Quote

After a misworded posting caused confusion about the 2020 deadline to file FBARs (i.e., FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)), Treasury’s Financial Crimes Enforcement Network (FinCEN) has extended the deadline to Oct. 31.

https://www.journalofaccountancy.com/news/2020/oct/fbar-deadline-extended-oct-31.html

 

And there's actual a longer extension to the end of the year, this year, for anyone affected by natural disasters, which probably doesn't apply to any Thailand residing folks.

 

Quote

On Friday, FinCEN apologized for Wednesday’s mistaken posting and, because some filers may have missed the Oct. 15 deadline due to the notice, announced that it is extending the deadline for calendar year 2019 FBARs to Oct. 31, 2020. (Victims of natural disasters covered by the Oct. 6 notice continue to have a Dec. 31 deadline.)

 

[MeePeeMai]

21 hours ago, bangkokgalaxy said:

The remaining question is what happens when people use agents. Does anyone have first-hand experience with FBAR after using an agent?  Are their tax implications?

 

17 hours ago, DFPhuket said:

In the case of using an agent, if the bank hasn't included a US citizen's social security number to the (temporary) account, I don't see how the IRS could track you as the owner or how it could impact FBAR. I assume the agent doesn't actually transfer 800,000 into the account of a US citizen?

 

It's an interesting question. 

 

Above board or "real" agents will deposit the 800k in YOUR bank account (not some fictional temporary account) which is in your name and if you are an American citizen then you must have filled out the paperwork to open said account including your SS# (which the bank uses to make the required annual or bi-annual report on said account).

 

The 800k is deposited in your account (in your name which you had opened), the requested Immigration letter is issued, the agent then takes you to the Immigration office and secures your 12 month extension and then you are taken back to the bank (usually another branch) and the money is withdrawn and returned to the agent.  

 

Even though this money was in your account for less than a day, it must be reported via FBAR (which is simple) or you may face huge fines and penalties.  There are no "tax implications" as a result of making your FBAR report as long as you correctly file your taxes and claim all of your income as required by the IRS.  The 800k (or 400k) was simply a "loan" that you took out from the agent and paid a hefty fee for.  It was not income and should not be declared as income on your taxes.

 

"For those whose lack of filing was non-willful (meaning you didn’t know about your reporting obligation), the fine can be $10,000 per violation. If it is determined that you purposely avoided filing, the fine can be $100,000 or 50% of the balance of the account at the time of the violation – whichever is greater. As you can see, penalties can add up quickly if you are years behind in your filing!"

 

And yes this is legal, it is considered a "VIP" extension since the head of each district IO has the power to use his or her "discretion" and make decisions (or exceptions) as he or she sees fit.  Some agents, for example, are merely retired Immigration Officers (or family members) with all the right connections.

 

Of course this would not fly in most Western countries, but like it or not, this is just how things are done here (and in many other SE Asian / South American countries).  

[connda]

If you have 800K THB in a Thai bank you need to file annually and list all of your foreign accounts. 

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

[soisanuk]

On 10/28/2020 at 12:10 PM, Presnock said:

to US citizens - re filing 1040 tax form, FBAR etc.  If you are a US citizen you are required to file tax forms if you make any money during the year.  Maybe under certain amounts or age you might get away with it.  But, the FBAR is done in conjunction with 54 other countries I read and actually goes to the Dept of Justice in the US.  When you file the 1040, there is one line you are required to fill out asking if you have a foreign bank account and in which country.  Thailand is also a signatory to this international banking law I heard that is trying to get rid of money laundering and/or tax non-filers.  Either way if you lie on the tax form saying you have no foreign bank acct when you do then you could be in trouble with the law.  If your foreign bank account has over $10,000.00 USD at any time (aggregate too) then the Thai bank is required to file a report to the US treasury/Justice dept. The forms are easy to file on line and unless you have some wild banking/US tax practices, then you should have no problem.  The laws are easy to find on line if one doubts what I have written.  I try to keep up with any changes as it is easier to follow the law guidelines vs any problems in the future!

 

Actually, there are two separate laws regarding US citizens/residents reporting their foreign bank accounts (one law) or their foreign financial assets (another law) - these separate laws have different requirements, thresholds, and type of reportto be filed to comply with them.

 

FBAR reporting is required under US Banking law and is intended to fight money laundering. The threshold, as mentioned, is an aggregate amount that exceeds $10,000 in one or more banks at any one time during the calendar year.  This report is filed with FinCen, a part of the US Treasury which is separate from the Internal Revenue Service (IRS) and is not connected to US income tax requirements. FBAR, as its name implies, applies only to deposits in foreign banks, i.e., Foreign Bank Account Report (FBAR)

 

US Foreign Account Tax Compliance Act (FATCA) is a different law and is intended to deter non-reporting of income for income tax purposes. This report is required to be included with the person's IRS Form 1040 (income tax return) provided they meet certain thresholds, which are different depending on filing status & residence. 

 

This is the law that requires foreign banks AND other financial institutions to report on accounts held by US Citizens/residents.  This law relates to the amount of financial assets held as of the end of the calendar year which can include bank accounts, stocks, mortgages (for the mortgagor, not the mortgagee), etc.  

 

The complexity of FATCA reporting is such that I will not comment on them here - too many variables depending on a persons circumstances.  The last time I checked, the agreements entered into with the foreign government/financial institution & US Treasury requires foreign banks to report accounts of US Citizens/residents that have the equivalent of US $50,000 on deposit at the end of the calendar year.  In Thailand, the agreement is between the Thai Government and the US Treasury. 

 

For a US Citizen/resident to include the report with their tax return, there are different thresholds.  In my case being a single filer that has resided outside of the US for the entire year (the prescribed time required as I recall is some 300+ days) and has foreign financial assets of less than $200,00 at the end of the calendar year of no more than $300,000 anytime during the year, I am not required to file IRS Form 8938 with my tax return.  If I did not qualify as being a taxpayer living abroad, the threshold is $50,000 at end of year or more than $75,000 anytime during the year.  

 

Also, no report is required if you do not have to file a U.S. income tax return for the year (if taxable income is below a certain amount, as shown in the Form 1040 instructions, you do not have to file a return, in which case, no From 8938 is required regardless of amount of foreign financial assets you may have).

 

The IRS has a very good summary of the requirements and notes the difference between FBAR reporting and FATCA reporting: https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers.

 

 

 

Edited October 29, 2020 by soisanuk