Are You Americans All Fbar Criminals?

[Misty]

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?

Hi Mike,

To the best of my knowledge, moving money between bank accounts does not generate income, and so there's no associated tax--even if those two bank accounts are in different countries. Once in the Thai account, you would still need to report interest earnings, but probably no US tax would be owed--as you've likely already had a 15% Thai w/h tax on interest and this amount could be taken as a foreign tax credit against US tax.

So for you, filing the FBAR may simply be a formality to comply with the general rules. The IRS is likely looking for people who have earned unreported and untaxed income overseas and then stashed it in a foreign bank account. The IRS is probably not so concerned with people such as yourself who've moved money that's already been taxed from inside a US account to a Thai bank account--since no tax or next to no tax is probably owed.

Hope that helps, Misty

[Jingthing]

Thailand is not top of the list for Americans seeking tax shelters. Nobody likes these reporting requirements but no need to get extra paranoid either. That said, I wouldn't feel so comfortable if I had failed to do these reports.

[Pib]

To me the yearly TD F90-22.1 reporting is just another form TurboTax prints out...sign the form and mail it to the appropriate U.S. Treasury address. Simple and easy....still simple and easy even if you download the form separately to complete and mail.

[Jingthing]

Its a drag you can't file the treasury form online. I think they should have a way on the treasury website to do this. They would get much greater compliance, isn't that what they want (or is it)?

[Pib]

Online filing would be great, but I expect the U.S. Treasury wants a real "on-paper" signature...the treasury department loves paper and they have been getting plenty of practice in using more paper as they print more money under the stimulus program.

Edited September 22, 2009 by Pib

[buzzer]

Online filing would be great, but I expect the U.S. Treasury wants a real "on-paper" signature...the treasury department loves paper and they have been getting plenty of practice in using more paper as they print more money under the stimulus program.

I was made aware recently (on Thaivisa) that I had to report about the money in Thai accounts. No problem, I thought I'd just take care of it at the normal tax deadline, then last weekend lurking on Thaivisa, I heard about FBAR and the looming Sept. 23 hour of doom. Thanks, again, for that - just in time.

Pib - In lieu of a signature on paper, what I was able to do was contact my CPA (Certified Public Accountant - for all you non-Yanks). He has my limited power of attorney, submitted by fax. So he will do the filing, hand-delivering it to a local IRS office, and send me a bill. Just in time for Sept. 23rd - Great!

Now, with the extension on the extension, one would have the time to send in a hard copy. If I had heard of this yesterday, I could have saved myself some money by filing it that way, but, I thought they were going to clap me in irons if I was late, and I'd no idea they, in their infinite wisdom, would extend an extension.

The FBAR isn't difficult to fill out, if you're just an individual with a single bank account over 10,000 USD/year. If you have a second account in which you keep your 'seasoned' money, you'd have to send in 2 forms for each year. The IRS pdf. link is here:IRS FBAR pdf. form

I was able to look at my bank books for the last 6 years, figure out the highest amount of THB I had and on what date that occurred. Then I found a nice little website that can tell what the THB/USD conversion rate was on any given date (going back to 1990), and converted it to the USD equivalent on that date.

I know that Thaivisa doesn't like posting website addresses, but I think this one they'll let slide. Go to: x-rates, and you'll see a nice, simple little historic foreign exchange converter. Pretty cool - it made my job a lot easier.

All this talk about criminals though. I think, indeed that there are some huge ones the IRS is trying to catch, but I don't think they're looking for expat retirees who are just bringing money they need to live on into Thailand. Just Big Brother watching out for you. Did I say, "Watching out"? Right! Delete the "out for" part.

Thanks - Buzzer

[Pib]

The FBAR isn't difficult to fill out, if you're just an individual with a single bank account over 10,000 USD/year. If you have a second account in which you keep your 'seasoned' money, you'd have to send in 2 forms for each year. The IRS pdf. link is here:IRS FBAR pdf. form

You only need to submit one form even with multiple accounts. Parts II, III, IV and/or IV of the form (as applicable to each person's situation) has blocks to enter multiple accounts. Note the duplicate areas in each Part beginning at block 15 which allows multiple account entries. Plus the instructions talks about how to entry multiple accounts on the form.

[buzzer]

The FBAR isn't difficult to fill out, if you're just an individual with a single bank account over 10,000 USD/year. If you have a second account in which you keep your 'seasoned' money, you'd have to send in 2 forms for each year. The IRS pdf. link is here:IRS FBAR pdf. form

You only need to submit one form even with multiple accounts. Parts II, III, IV and/or IV of the form (as applicable to each person's situation) has blocks to enter multiple accounts. Note the duplicate areas in each Part beginning at block 15 which allows multiple account entries. Plus the instructions talks about how to entry multiple accounts on the form.

Hi Pib,

Thanks! My mistake. As i already hired my accountant to do it, I guess I read through it hastily. - Buzzer

[harkish]

This FBAR thing really is a problem - given that I have a UBS account in Zurich, and have been behind on my tax filing. Anyone know a good CPA based here in Bangkok who can help me figure out what the heck I do to clear up my situation?

[Pakboong]

Don't give the IRS a reason to come after your money as they can be quite powerful and can cause you mountains of grief. Take it from one who has had it happen. Even if you are right, getting things sorted out can be very uncomfortable and disruptive.

[ronswelters2]

I got some advice from a man who knows a lot about these things.

"where did you hear about all this FBAR stuff"?

"Guy in a bar."

"otherwise wouldn't have known. Or it could be just a myth."

"right."

"You plan on spending your remaining days here in Thailand."

"yep."

"you figure it out."

[dr_Pat_Pong]

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

You only need the 800,000 in the bank here for the 3 months before you renew your retirement visa each year.

[OriginalPoster]

Online filing would be great, but I expect the U.S. Treasury wants a real "on-paper" signature...the treasury department loves paper and they have been getting plenty of practice in using more paper as they print more money under the stimulus program.

I was made aware recently (on Thaivisa) that I had to report about the money in Thai accounts. No problem, I thought I'd just take care of it at the normal tax deadline, then last weekend lurking on Thaivisa, I heard about FBAR and the looming Sept. 23 hour of doom. Thanks, again, for that - just in time.

Pib - In lieu of a signature on paper, what I was able to do was contact my CPA (Certified Public Accountant - for all you non-Yanks). He has my limited power of attorney, submitted by fax. So he will do the filing, hand-delivering it to a local IRS office, and send me a bill. Just in time for Sept. 23rd - Great!

Now, with the extension on the extension, one would have the time to send in a hard copy. If I had heard of this yesterday, I could have saved myself some money by filing it that way, but, I thought they were going to clap me in irons if I was late, and I'd no idea they, in their infinite wisdom, would extend an extension.

The FBAR isn't difficult to fill out, if you're just an individual with a single bank account over 10,000 USD/year. If you have a second account in which you keep your 'seasoned' money, you'd have to send in 2 forms for each year. The IRS pdf. link is here:IRS FBAR pdf. form

I was able to look at my bank books for the last 6 years, figure out the highest amount of THB I had and on what date that occurred. Then I found a nice little website that can tell what the THB/USD conversion rate was on any given date (going back to 1990), and converted it to the USD equivalent on that date.

I know that Thaivisa doesn't like posting website addresses, but I think this one they'll let slide. Go to: x-rates, and you'll see a nice, simple little historic foreign exchange converter. Pretty cool - it made my job a lot easier.

All this talk about criminals though. I think, indeed that there are some huge ones the IRS is trying to catch, but I don't think they're looking for expat retirees who are just bringing money they need to live on into Thailand. Just Big Brother watching out for you. Did I say, "Watching out"? Right! Delete the "out for" part.

Thanks - Buzzer

Isn't/wasn't the "extended" Sept 23 deadline the deadline for filing for the 2008 tax year? The way that I interpreted the instructions on the form was that the deadline for for the 2009 tax year would be June 30, 2010.

[bridge]

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$.

Here here

[Chunkton]

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$.

Is that the color of an obvious fascist/socialist regime? Instead of doing your John Wayne impersonation with your head in the sand how about agitating for change back home as the republic is destroyed brick by brick. Aren't you embarrassed, aren't you angry at those that are doing this, because you lot are becoming a world joke?

[CaptainARK1]

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$.

Is that the color of an obvious fascist/socialist regime? Instead of doing your John Wayne impersonation with your head in the sand how about agitating for change back home as the republic is destroyed brick by brick. Aren't you embarrassed, aren't you angry at those that are doing this, because you lot are becoming a world joke?

50,000 UK-ites bashing 4-5 Americans who've already been bashed to a pulp repeatedly at this, now well known, American Bashing Central station. Same sh*t, different UK site.

If this so-called world joke (the USA) turned her back on the UK, the latter would become a chinese or russian province in one afternoon - that is, if the French + Germans don't get there first and thoroughly euro them.

[imaneggspurt]

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.

Great post,and i agree, my (ex ) country also (uk) is taxed to the hilt and for what ?.to fight wars that have nothing to do with us and to suck up to uncle sam., Edited October 5, 2009 by imaneggspurt

[taxout]

If you somehow missed the first FBAR Amnesty Program, there may be another one coming soon, though on less favorable terms than the first.

From today's New York Times:

Mr. Shulman [iRS Commissioner] also disclosed that the I.R.S. was considering offering a second amnesty..

"We are seriously considering another voluntary disclosure," he said, adding that United States taxpayers who entered into it "will not get the same deal as those" in the previous program because they failed to come forward at their first opportunity. That means immunity from prosecution or reduced penalties and fines might not be available.

http://www.nytimes.c.../17tax.html?hpw

[TallGuyJohninBKK]

And another still in the news today....

IRS Gives Another Chance to U.S. Citizens With Undeclared Assets

By Steven Sloan | Bloomberg

The Internal Revenue Service is giving U.S. citizens who have shielded assets offshore a third opportunity to come clean, pay a penalty and avoid criminal prosecution.

After collecting $4.4 billion in two so-called voluntary disclosure programs for offshore accounts, the IRS announced plans yesterday to revive the program. Participants will pay as much as 27.5 percent of their most valuable offshore assets or their biggest overseas bank account. They also must disclose the banks and advisers that helped them escape U.S. tax laws.

The program's revival is part of the U.S. government's efforts to track down and prevent tax evasion around the world. Since 2009, the U.S. has prosecuted clients of UBS AG (UBSN) and HSBC Holdings Plc. (HSBA) Switzerland's Weglin & Co. said on Jan. 4 that three of its bankers have been charged with conspiring to help U.S. clients hide more than $1.2 billion from the IRS.

MORE

And an interesting sidenote within the same article:

Taxpayers with undeclared assets might be more willing to work with the IRS amid fewer options to protect themselves offshore, said Kevin Packman, the chairman of the offshore tax compliance team at Holland & Knight LLP in Miami.

Meanwhile, some banks aren't taking U.S. clients because they don't want to comply with a rule being developed that would require overseas financial institutions to report the identities of such customers to the IRS.

"You have a whole host of banks throughout Europe who are kicking out taxpayers," Packman said in a telephone interview. "You have nowhere to hide. Even people in compliance outside the U.S. are having trouble keeping their accounts open."

There's been a lot of chatter on ThaiVisa in recent years about this becoming a potential problem with banks here in Thailand...even for those Americans who are in full compliance... Interesting to see the above comments about banks handling of this in Europe.

Edited January 10, 2012 by TallGuyJohninBKK

[partington]

Wait until you poor Americans realise that the IRS has just introduced ANOTHER reporting requirement for overseas accounts, that has to be included with your 2011 1040 tax form, i.e. it goes to the IRS, NOT the Treasury.

Anyone who has an interest in overseas financial assets worth over $50000 in aggregate has to submit this for taxation purposes. It is form 8938.

This does not replace, but is in addition to, the FBAR form.

Oh, penalty for non-filing, $10000. To confirm:

http://www.traderstatus.com/fatca.htm

(I'm so glad I released myself from all this freedom by ceremonially abandoning my green card at the US Embassy, and getting a certificate to prove it!)

Good luck!

[Khun Jean]

Buy some gold, problem solved.

[Jingthing]

Is a bank account considered a "financial account" for form 8938 purposes? On first reading, it sounds not.

[OriginalPoster]

I understand from the frequent threads in ThaiVisa that FBAR is the biggest affront to human rights since Roosevelt bombed Pearl Harbor, but how many people have been convicted of FBAR violations thus far? Must be tens of thousands, right?

Edited January 12, 2012 by OriginalPoster

[partington]

Is a bank account considered a "financial account" for form 8938 purposes? On first reading, it sounds not.

I think so JT, the instructions say (among others):

"1. Any financial account maintained by a foreign financial institution"

classically any bank account, stock trading account, fixed interest account etc. etc.

see http://www.irs.gov/p.../i8938--dft.pdf

[happysanook]

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.

lol ...no doubt .... expats paying the bailout...

fuc_k them. u cant get blood from stone...or can u. im sure they'll figure a way.

Posted with Thaivisa App http://apps.thaivisa.com

[Jingthing]

Is a bank account considered a "financial account" for form 8938 purposes? On first reading, it sounds not.

I think so JT, the instructions say (among others):

"1. Any financial account maintained by a foreign financial institution"

classically any bank account, stock trading account, fixed interest account etc. etc.

see http://www.irs.gov/p.../i8938--dft.pdf

I am still not sure. The FBAR form title distinguishes between bank accounts and financial accounts. The title is:

REPORT OF FOREIGN BANK AND FINANCIAL ACCOUNTS

So, I am not sure if this new thing included bank accounts.

[partington]

Is a bank account considered a "financial account" for form 8938 purposes? On first reading, it sounds not.

I think so JT, the instructions say (among others):

"1. Any financial account maintained by a foreign financial institution"

classically any bank account, stock trading account, fixed interest account etc. etc.

see http://www.irs.gov/p.../i8938--dft.pdf

I am still not sure. The FBAR form title distinguishes between bank accounts and financial accounts. The title is:

REPORT OF FOREIGN BANK AND FINANCIAL ACCOUNTS

So, I am not sure if this new thing included bank accounts.

You know what, I think you are right and I've misunderstood the definition.

Had a quick search, and this page seems to define these assets (SFFAs) but excludes bank accounts:

http://trustsandesta...tructions-1026/

As you say the FBAR form distinguishing 'Bank' and 'Financial' accounts also suggests that these represent different entities.

Thanks for pointing this out, as I don't want to be spreading false information!

[JimGant]

An SFFA includes (1) any financial account maintained by a foreign financial institution

Which certainly would include bank accounts -- as hidden foreign bank accounts are the biggest source for unreported income, which is where FATCA is coming from.

FBAR is certainly not well designed, hence all the annual re-writes. That bank accounts are just one part of "financial accounts" becomes clearer in Part III, "Information on Financial Accounts Owned Jointly, " where you're asked to indicate the type of financial account: "Bank, Securities, Other." So, I think the FBAR folks meant to say "Foreign Bank and Other Financial Accounts."

Can't get too excited about Form 8938. Our biggest asset is our house and land -- which we live in, so it's not reportable. Plus, the $400k/$600k reporting thresholds for married filing jointly is not going to net too many folks reading this forum. Looks like it's the folks living in the States, and salting their money abroad, who are the prime targets -- as their thresholds are less.

I was glad to see the writers of the 8938 instructions were better able to convey exactly who, other than US citizens and permanent residents, were responsible for filing, namely: "Nonresident aliens who elect to file a joint income tax return." I.e, the folks with the ITIN numbers. The FBAR authors leave it hanging at "US persons," without further explanation -- just a solo mention of "ITIN" in just their latest re-writes.

[JimGant]

And, TurboTax's instructions are even clearer than the Feds (imagine that....):

There are two types of foreign financial assets: 1) foreign financial accounts; and 2) what the IRS calls "other foreign financial assets."

A foreign financial account is any depository, custodial or securities account (bank account, savings account, mutual funds, etc.) maintained by a foreign financial institution, including institutions organized under the laws of a U.S. possession.

Other foreign financial assets include any of the following that are held for investment and not held in an account maintained by a financial institution:

- Stock or securities issued by someone other than a U.S. person

- Any interest in a foreign entity, including foreign pension plans, trusts, estates, corporations, partnerships, options and other derivative instruments, debt instruments, interest rate and other swaps or similar agreements

- Any financial instrument or contract that has an issuer or counterparty that is other than a U.S. person

Note: Real estate located in a foreign country is not considered a foreign financial asset...........

[BEENTHEREDONETHAT]

Interesting article from expatexchange.com

The IRS has added ANOTHER required form, Form 8938, to be filed WITH your annual tax return. This form is also loaded with $10,000 non-filing or incorrect filing penalties. Additional penalties may be assessed, up to $50,000 for continued failure to file after IRS notification. A 40 percent penalty on any understatement of tax attributable to non-disclosed assets can also be imposed. A special statute of limitation also applies to the filing of Form 8938. Here are some other points to note:

Foreign Financial Institutions will begin reporting your financial accounts to the IRS.

Starting in 2013, foreign financial institutions will need to be compliant with IRS reporting regulations or abandon working with the U.S. markets and U.S. citizens abroad. Some large foreign financial institutions have already determined that complying with the IRS regulations is not worth the cost of doing business with U.S. citizens abroad. Some of our clients have received notices from their foreign banks and institutions requesting that they close their accounts. However, we anticipate the majority of foreign financial institutions will become compliant and report your information to the IRS beginning in 2013. Per IR-2011-53, these regulations have been delayed until 2014.

You will be required to file NEW IRS form 8938 with your tax return.

Beginning with the 2010 tax year – yes, beginning with your 2010 tax return – you need to file Form 8938 OR pay a $10,000 penalty to the IRS.

Did YOU miss filing this form with YOUR 2010 tax return? Don't panic.

While you were required to file this form with your 2010 tax return, the IRS has not completed the final version of the form nor the instructions. Lucky you, you cannot YET file this form. However, in the year that the IRS actually does finalize this form and its instructions, ALL prior year reports will be due. So, keep your 2010 (and each year after) foreign financial accounts information handy; you may be filing several years' worth of forms at once. IR-2011-117 was released on 12/15/11, The IRS tells us that this document is ‘still coming' and may be only days away. They are stating that it will need to be filed with your 2011 tax return, but it's still NOT READY.