Are You Americans All Fbar Criminals?

[ronswelters2]

Even then, by reporting by the deadline next week that you might have had more than 350,000 baht in a Thai bank sometime it appears that you will be a criminal who is voluntarily "turning himself in" and might be treated leniently (eg only fined $10,000 and not sent to prison).

Any warm feelings on this matter among you Americans out there?

Ron

Edited September 20, 2009 by ronswelters2

[Thanyaburi Mac]

Even then, by reporting by the deadline next week that you might have had more than 350,000 baht in a Thai bank sometime it appears that you will be a criminal who is voluntarily "turning himself in" and might be treated leniently (eg only fined $10,000 and not sent to prison).

Any warm feelings on this matter among you Americans out there?

Ron

I'm a coward when IRS & the Dept of Treasury are concerned so got caught up and mailed in the form last week, four of them.

Wasn't this issue discussed on TV a couple months back? CRS, but I do have a WSJ article I saved, it's below.

The form, which is downloadable, is the: TD F90-22.1, Oct 08

Mac

http://online.wsj.com/article/SB124804796387763807.html

20 July 2009, WSJ

IRS Gets Tougher on Offshore Tax Evaders

By LAURA SAUNDERS

The Internal Revenue Service has stepped up scrutiny of offshore accounts and foreign income, an enforcement campaign that could sweep up tens of thousands of taxpayers.

The push to recover some of the billions of dollars lost each year to offshore tax evasion goes beyond the government's high-profile effort to force Swiss bank UBS AG to release the names of 52,000 American account holders in order to nab tax evaders.

The IRS is using a once-obscure tax form called the Foreign Bank Account Report, or FBAR, to force taxpayers to provide information on income they earn or bank accounts they hold overseas. It is threatening tough action against taxpayers who don't file the form and has greatly broadened those subject to filings beyond direct owners of offshore accounts. The requirement applies to U.S. citizens and residents who have offshore accounts totaling $10,000 at any point during the year.

This spring, the IRS announced a Voluntary Disclosure program for people who haven't been paying taxes on overseas income. The agency warned that those who don't confess by Sept. 23 will be hit with far bigger penalties. Recently, the IRS has been asking for face-to-face interviews with many who have come forward.

FBAR Quirks

Because the FBAR technically is part of the bank secrecy act (Title 31) rather than the income tax code (Title 26), it contains traps for those who are used to tax law. Unlike income tax forms, FBAR forms must be received by the due date, not just mailed by it. There is no electronic filing, and forms must be mailed to a special address in Detroit rather than a taxpayer's usual IRS service center, although they may also be hand-delivered to a local IRS office. Unless Congress changes the law, the normal FBAR due date will remain June 30, which is out of sync with the normal tax deadlines of April 15 and October 15 (for those on extension).

Q. Who must file an FBAR?

A. Any United States person who has a financial interest in or signature authority, or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year

Taxpayers who want to challenge FBAR penalties cannot do so in Tax Court, where they don't have to pay the tax, penalties and interest up front, notes Chamberlain Hrdlicka's Sheppard. Instead, taxpayers must pay the total liability -- which can be huge as a result of the penalties -- and sue for a refund in U.S. District Court. Also surprising to taxpayers (and perhaps their advisers) is that FBAR penalties are not dischargeable in bankruptcy. These little-known traps were highlighted in two recent cases, Williams v. Commissioner and United States v. Simonelli.

Last, most taxpayer data is protected under stringent IRS rules that make unauthorized sharing a felony. FBAR forms are not protected under those rules; instead, they are governed by a different privacy act and may readily be shared with other law enforcement agencies, according to Miller & Chevalier's Clarke.

In June, the agency announced that the filing requirements apply to investors in offshore hedge and mutual funds. That caused a backlash, and the IRS agreed to delay the deadline for filing this year's form to Sept. 23 from the normal due date of June 30.

Now, tax lawyers and accountants say they are being deluged by taxpayers with overseas holdings, worried they will face civil penalties -- or even criminal charges. Christine Ballard, a managing director at tax preparer RSM McGladrey, said the firm will prepare some 1,000 civil FBAR filings this year, perhaps double the number last year, with thousands more in the offing depending on how the IRS interprets some rules on offshore investments. Criminal attorney George Clarke of Miller & Chevalier in Washington reports a tenfold increase in such inquiries compared with last year.

The penalties for offshore income violations are now among the toughest in the tax system. Those who have inadvertently failed to report offshore income, even just a few hundred dollars, could be subject to a $10,000-a-year penalty going back several years.

For those the IRS considers willful tax evaders, it is much worse. The IRS can impose a penalty of $100,000, or one half the value of the account, whichever is greater, per year. "I just helped a 67-year-old man who cannot sleep, he's so nervous," says New York certified public accountant Stuart Kessler. "He's saying, 'What if they find me before I turn myself in?'"

No one knows how many new forms will be filed before the Sept. 23 deadline, but it is expected to be much higher than the 386,000 forms filed last year. Those who already paid taxes on foreign income but didn't file the form may escape civil penalties, the agency says. Meanwhile, those who didn't pay taxes but come forward voluntarily won't be recommended for criminal prosecution.

Tax advisers say IRS agents are using a prepared list of 30 questions to grill taxpayers who come forward to confess to nonpayment of tax under its Voluntary Disclosure program. Among other things, they are asked who told them about the foreign bank account or investment, who helped open it, and whether there is a credit card tied to the accounts. One goal is to figure out who is promoting these offshore accounts. The IRS says there is no standard list of questions.

The Sept. 23 deadline applies to two groups of taxpayers. One consists of U.S. citizens and residents who haven't been paying tax on foreign income. The IRS wants these taxpayers to confess under the voluntary-disclosure program. All applications are inspected first by the criminal division of the IRS.

The other group includes those who have been paying tax on foreign income but not filing the form because they were unaware or believed it wasn't required. Among others, it now includes U.S.citizens and residents with signature authority over a foreign account, such as executors or employees of a business; those with interests in foreign partnerships or controlled foreign corporations; beneficiaries and even potential beneficiaries of trusts, and investors in foreign-based Individual Retirement Accounts and pension plans.

Although taxpayers are exempt from filing if the total value of accounts never tops $10,000 at any point during a year, there is no exemption for even small amounts of income if the account goes above that point. The IRS also allows an exemption for non-income-producing properties, such as artwork. The agency has suspended, just for this year, a provision forcing foreigners doing business in or with the U.S. to file as well.

Says Eileen Sherr, a manager of the American Institute of Certified Public Accountants in Washington: "If your daughter spends her junior year abroad and has an account there, or your Brazilian wife never closed an account in S?o Paulo, you might have an FBAR filing requirement." Filings are likely to jump this year because of multiple filings on the same accounts, especially by trust firms and money managers, she says, adding, "If there are 30 potential beneficiaries of one trust, even children, all may have to file or risk the $10,000 nonfiling penalty."

Taxpayers trying to bring a foreign account into compliance are finding the process difficult because it can mean getting up to six years' worth of back statements from overseas institutions. The statements are necessary to determine how much tax and interest is due.

It's also expensive. Mr. Kessler, the New York CPA, cites one recent voluntary-disclosure case that cost about $20,000 in advisers' fees to resolve, on top of taxes, interest, and penalties. A complex case could run more than $50,000, says Miller & Chevalier's Mr. Clarke.

The price for not complying is even stiffer. In a statement, the IRS detailed the total amount of tax and penalties due on a $1 million offshore account that generated $50,000 in unreported annual income for the past six years. If the taxpayer were to come forward under the Voluntary Disclosure program ending in September, the figure would be $386,000 plus interest. But if the IRS discovers this taxpayer on its own, he or she could face as much as $2.3 million in tax and penalty plus interest. Such a taxpayer might also be subject to criminal prosecution, the IRS added.

Write to Laura Saunders at: //e-mail removed//

More information at: http://tinyurl.com/mc6zt2

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[Nowhereman60]

I get tired of reading all these anti-American comments here that has nothing to do with Thailand. Kiss my red, white and blue American a$$.

[skipvice]

What Nowhereman60 means is we appreciate all the warm feelings and concerns for us americans. Most of us keep our funds in a US Bank and just tranfer money as needed. So no need to worry.

Edited September 20, 2009 by skipvice

[ronswelters2]

I get tired of reading all these anti-American comments here that has nothing to do with Thailand. Kiss my red, white and blue American a$.

Just for the record, the OP is American himself. And for those who use US banks, remember the minimum needed for retirement visa, isn't that more than $10,000? As I read the rules, if you've done that and not reported to US, you are a criminal. And if you now fess up, there's every reason to expect harrassment.

All of this seems to me a serious erosion of freedom under the "war on terror" which strikes this Amereican as much more dangerous that the terror itself

[skipvice]

I get tired of reading all these anti-American comments here that has nothing to do with Thailand. Kiss my red, white and blue American a$.

Just for the record, the OP is American himself. And for those who use US banks, remember the minimum needed for retirement visa, isn't that more than $10,000? As I read the rules, if you've done that and not reported to US, you are a criminal. And if you now fess up, there's every reason to expect harrassment.

All of this seems to me a serious erosion of freedom under the "war on terror" which strikes this Amereican as much more dangerous that the terror itself

Yes all that spending the US goverment is doing on Bail outs and such has to come from somewhere, the american tax payer.

Edited September 20, 2009 by skipvice

[jcon]

The IRS can impose a penalty of $100,000, or one half the value of the account, whichever is greater, per year.

So basically they take it all....

shit.

[Carmine6]

Be glad you're not small business owners failing to report their "tax shelter" retirement plans, and facing million dollar fines for the reporting failure. What "shelter" were they doing? Overfunding pension plans for them and their employees. Except they didn't know it was overfunding since the IRS had originally approved the plans.

http://online.wsj.com/article/SB1253314891...MIDDLTopStories

Five years ago, car-wash owner Orman Wilson set up a pension plan for himself and six employees. For that, he may owe the IRS a $1.2 million tax penalty.

Mr. Wilson, the owner of 19 coin-operated car washes in Houston, says he relied on four advisers, including a certified public accountant, to set up a plan that received approval from the Internal Revenue Service. Then, in late 2007, the IRS found fault with the plan and assessed it $250,000 -- plus special penalties of $1.2 million.

..."The fines are not for the shelter itself," says Mr. Brucker, "but merely for failing to file the form disclosing the transaction."

....A Baltimore physician faces a $400,000 fine for failing to notify the IRS of a transaction on his individual return, even though he fully disclosed it on his business return...

[puyaidon]

Those of us who are Americans find that there is one part of the tax code that says you will report your income but there is another that says that you don't have to report overseas income if it is not over a certain amount. I think it is $80,000 of foreign income. I have to report my income to the IRS as well as skipvice as it is income derived from the US as a pension. My job here in LOS before did not require my reporting as it did not exceed the $80,000 amount. Besides, while we are overseas, we can't be audited as there is no IRS office close by. There are specific guidelines regarding the IRS actions with auditing.

[flying]

Yes all that spending the US goverment is doing on Bail outs and such has to come from somewhere, the american tax payer.

[skipvice]

Yes all that spending the US goverment is doing on Bail outs and such has to come from somewhere, the american tax payer.

Thanks for that

[TongueThaied]

Even then, by reporting by the deadline next week that you might have had more than 350,000 baht in a Thai bank sometime it appears that you will be a criminal who is voluntarily "turning himself in" and might be treated leniently (eg only fined $10,000 and not sent to prison).

Any warm feelings on this matter among you Americans out there?

Ron

I am an American, and am proud of what America (supposedly?) stands for. But I despise the government and what has happened to my country. It's ironic, I have many more "rights" in America that I could ever hope for in Thailand. However, those "rights" are strictly construed. Make one mistake and the cops, inspectors, bureaucrats or whoever, are all over you. Not corrupt, because the money they then collect flows through the proper channels, but VERY expensive -- like the $107 ticket I got for standing behind my friend's truck in a Nevada desert taking a leak, with only my head and shoulders in view of traffic.

In Thailand, as long as I don't become too obnoxious, I have a lot more actual "freedom" than I could ever hope for in the U.S. Mind my own business and nobody messes with me. That's why I'm here.

[Jingthing]

I hate it, but I file it. So all Americans are not FBAR criminals, duh ...

Yes I agree Americans are not as free as many imagine themselves to be. However, I have "left the building" and find the idea of fighting the US government (which is mostly owned by business interests, Obama or Nobama) to be well beyond my personal power (sorry founding fathers, I don't think it really worked).

So I try to stay out of trouble.

Edited September 21, 2009 by Jingthing

[12DrinkMore]

the $107 ticket I got for standing behind my friend's truck in a Nevada desert taking a leak, with only my head and shoulders in view of traffic.

Which "pee" did you violate?

Parking

Pissing

Pornography

Pollution

?

:D

[cyb]

Even then, by reporting by the deadline next week that you might have had more than 350,000 baht in a Thai bank sometime it appears that you will be a criminal who is voluntarily "turning himself in" and might be treated leniently (eg only fined $10,000 and not sent to prison).

Any warm feelings on this matter among you Americans out there?

Ron

I am an American, and am proud of what America (supposedly?) stands for. But I despise the government and what has happened to my country. It's ironic, I have many more "rights" in America that I could ever hope for in Thailand. However, those "rights" are strictly construed. Make one mistake and the cops, inspectors, bureaucrats or whoever, are all over you. Not corrupt, because the money they then collect flows through the proper channels, but VERY expensive -- like the $107 ticket I got for standing behind my friend's truck in a Nevada desert taking a leak, with only my head and shoulders in view of traffic.

In Thailand, as long as I don't become too obnoxious, I have a lot more actual "freedom" than I could ever hope for in the U.S. Mind my own business and nobody messes with me. That's why I'm here.

And you can take a leak (within reason) without fear.

[Naam]

Those of us who are Americans find that there is one part of the tax code that says you will report your income but there is another that says that you don't have to report overseas income if it is not over a certain amount. I think it is $80,000 of foreign income. I have to report my income to the IRS as well as skipvice as it is income derived from the US as a pension. My job here in LOS before did not require my reporting as it did not exceed the $80,000 amount. Besides, while we are overseas, we can't be audited as there is no IRS office close by. There are specific guidelines regarding the IRS actions with auditing.

don't think. get facts or the IRS will get you.

[thaihome]

Those of us who are Americans find that there is one part of the tax code that says you will report your income but there is another that says that you don't have to report overseas income if it is not over a certain amount. I think it is $80,000 of foreign income. I have to report my income to the IRS as well as skipvice as it is income derived from the US as a pension. My job here in LOS before did not require my reporting as it did not exceed the $80,000 amount. Besides, while we are overseas, we can't be audited as there is no IRS office close by. There are specific guidelines regarding the IRS actions with auditing.

You are confusing the Foreign Income Exclusion with not reporting. Even if you have foreign income less then the Exclusion, you still must file [a 1040 form] and report all worldwide income. Part of the calculation is excluding the first 87k (or so) of foreign income and then paying tax on any remaining amount.

I have not heard that the IRS cannot audit you while living overseas. Can you provide a reference to these guidlines that prevent them from doing so?

TH

[hansnl]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

[Thaibloke]

ask ACORN maybe they can help

[wildoates]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

You are wrong, I get a pension from the US, pay taxed in the US on my pension, but pay no Thai tax on the money I bring into a Thai bank. Only pay taxes on the instrest I earn here on that money in the bank.

[Naam]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

no taxes on this amount. taxes only on any interest on it.

[Naam]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

You are wrong, I get a pension from the US, pay taxed in the US on my pension, but pay no Thai tax on the money I bring into a Thai bank. Only pay taxes on the instrest I earn here on that money in the bank.

"hansnl" said "technically".

[Naam]

Those of us who are Americans find that there is one part of the tax code that says you will report your income but there is another that says that you don't have to report overseas income if it is not over a certain amount. I think it is $80,000 of foreign income. I have to report my income to the IRS as well as skipvice as it is income derived from the US as a pension. My job here in LOS before did not require my reporting as it did not exceed the $80,000 amount. Besides, while we are overseas, we can't be audited as there is no IRS office close by. There are specific guidelines regarding the IRS actions with auditing.

You are confusing the Foreign Income Exclusion with not reporting. Even if you have foreign income less then the Exclusion, you still must file [a 1040 form] and report all worldwide income. Part of the calculation is excluding the first 87k (or so) of foreign income and then paying tax on any remaining amount.

I have not heard that the IRS cannot audit you while living overseas. Can you provide a reference to these guidlines that prevent them from doing so?

TH

correct!

[cocopops]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

There is a rule in politics that I haven't figured out 100% yet, but it is basically that you can always get away with things they don't expect you to do. Applies doubly so in America, where there is no loyal opposition to speak of. Republicans (Bush, Reagan) can run up huge deficits without anybody saying anything (cos Republicans don't do that right?). Democrats can fight wars (Obama, Clinton) and nobody cares (cos Democrats don't do that, right?). And the US government in general is not obliged to consider the rights of individuals (cos it's the US - obviously they're all about individual rights, no?).

That's why they spend so much time in school explaining to you things like "freedom of speech". Makes sure you don't worry about it later on. Actually that's not such a bad example... For fun, check out the actual history of how political speech has been protected in American courts. When you compare it to the other English speaking nations that don't make such a song and dance about these things, it's actually not that protected at all (talking about actual, meaningful political speech here, not red herrings like advertising Nazi memorabilia or swearing in rap music etc.).

[lannarebirth]

I am not an American, and I am not anti-US, but when I read all this I cannot escape the feeling that somewhere along the road of history, the much praised freedom of the US has become a fable.

Correct me if I am wrong.

Somebody receives a pension from the US. The same somebody lives in Thailand permanently. Again the same somebody has to pay taxes is the US. And technically the same poor fellow has to pay Thai taxes on the amount brought into Thailand.

The same poor sucker has to pay taxes on the amount of money he has to put in a Thai bank for getting his extensions?

Unbelievable.

May I call this unfair, or in any case, a breech of freedom?

There is a rule in politics that I haven't figured out 100% yet, but it is basically that you can always get away with things they don't expect you to do. Applies doubly so in America, where there is no loyal opposition to speak of. Republicans (Bush, Reagan) can run up huge deficits without anybody saying anything (cos Republicans don't do that right?). Democrats can fight wars (Obama, Clinton) and nobody cares (cos Democrats don't do that, right?). And the US government in general is not obliged to consider the rights of individuals (cos it's the US - obviously they're all about individual rights, no?).

That's why they spend so much time in school explaining to you things like "freedom of speech". Makes sure you don't worry about it later on. Actually that's not such a bad example... For fun, check out the actual history of how political speech has been protected in American courts. When you compare it to the other English speaking nations that don't make such a song and dance about these things, it's actually not that protected at all (talking about actual, meaningful political speech here, not red herrings like advertising Nazi memorabilia or swearing in rap music etc.).

Insightful.

[Beacher]

I get tired of reading all these anti-American comments here that has nothing to do with Thailand. Kiss my red, white and blue American a$.

That's not fair! Anti-Americanism isn't just limited to Thailand - it's very wide spread - probably exists now in most countries of the world. (Personally, I think you Yanks can thank Mr. Bush (the evil puppet) for alienating the rest of the world.)

Edited September 21, 2009 by Beacher

[dekestone]

The amnesty deadline has been extended to Oct. 15. The IRS claims 3000 people have come forward seeking amnesty for tax evasion through offshore accounts. That doesn't seem like very many to me, considering UBS alone is going to give up 4500 names and that's only one bank in Switzerland. What about the other Swiss banks? And then there's Caymen Islands, Lichtenstein, etc.

Is offshore tax evasion really dead as they claim?

[parallaxtech]

What bothers me is that if you now send in the FBAR under the Amnesty Program, you will be considered a tax evader. Like most retirees here I have to keep 800KB in a Thai account, which has been transferred directly from my US account. Since this amount has already been taxed to death in the US (income tax, ss tax, capital gains tax, etc.), I am concerned that they will want to tax it again. I don't generate work income here or in the US, file the 1040 each year, but have never checked the box for having a foreign bank account. According to the FBAR FAX on the irs.gov site, I have to send the FBARs in by Sept 23rd (did last week), but also send copies of the FBARs plus tax returns to another investigative office. It sounds to me like I am building a case against myself. The question is if you are sending $24k directly from a US account into a Thai account for a retirement visa, how is that evading taxes? If anyone knows a cpa here in Thailand or in the US who would answer emails, please provide an email address.

As an aside I contacted five US citizens living in Samui and asked them if they had filed an FBAR and checked their 1040. They all said they hadn't and on top of that hadn't filed a 1040 since they left the US. They all travel back and forth to the US and have never had a problem. They all just said, "Hey, relax and don't worry about it -- f..k the US." I am trying to follow US law and frankly am a nervous wreck.

Thanks,

Mike

[PeaceBlondie]

One more benefit to using the pension method to qualify for retirement here, and not having US$23,500 in a Thai bank.

[Jingthing]

One more benefit to using the pension method to qualify for retirement here, and not having US$23,500 in a Thai bank.

A foreign account (or combination of accounts) over 10K USD for even one second must be reported on FBAR.