Thai Bank Accounts For Us Nationals

[maewang99]

today the IRS announced a 2nd amnesty program. just a reminder for any US citizen having a total of more than 300,000 baht in Thai banks or local stock brokers (the "FBAR" limit is $10,000 US).

you can lose more than what you have in the account(s)

Thailand and the US have a Double Tax Treaty (information sharing)

remember UBS? 300,000 baht.

[craig]

I guess I'm just an old ignorant fart. I retired here & transfer enough money every year from my US bank...money already taxed. I've lived here 7years and just learned about this issue. I've never filled out a FBAR.

Am I screwed?

[maprao]

All U.S. Citizens and residents are required to report offshore bank accounts with balances in excess of $10,000.00. This includes both U.S. citizens living in Europe or Asia and foreign citizens who have residency in the U.S. and are subject to U.S. tax laws. The reporting of offshore accounts is done by filing a Report of Foreign Bank and Financial Accounts (FBAR) in June to report the accounts for the previous year. In addition, income on foreign accounts must be declared on U.S. income tax returns and offshore accounts must be disclosed on Schedule B of the income tax return.

The failure to file the FBAR is a felony for each year that the FBAR is not timely filed. In addition, the failure to report income of foreign accounts can constitute the crime of tax evasion.

In addition to criminal prosecution, the IRS imposes civil penalties for failure to file the FBAR. The civil penalty is 50% of the value of the account each year that the FBAR is not filed.

WT* Glad not to be a us citizen!

Edited March 2, 2011 by maprao

[lopburi3]

The report does not have to be filed in June as stated in the above post but before June 30. I always prepare and send at the same time I do tax so as not to forget it.

The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold.

[lopburi3]

If your total overseas account(s) value does not exceed $10k at any time it would not have to be filed. If you were not aware start doing as it is not designed to trap normal taxpayers (but help to convict those under investigation for other crimes). But as computers advance expect closer watch will be made so best to be safe than sorry.

[Langsuan Man]

Here is the Treasury Reporting (FBAR) form, with instructions

TD F 90-22.1.PDF

[JimGant]

As Lopburi says, the FBAR form is just any easy nail to hang money-laundering crooks on that might otherwise slip through. For you and me, it should be completely irrelevant whether we fill the forms out incorrectly (or whether we even file, although surely best to humor the Feds, just in case....).

But, speaking of filling out the FBAR form incorrectly (as the form is not exactly intuitive...).....

....last year, Turbotax had the FBAR form (presume this year too, but haven't done my taxes yet). Yet, when they walked me through it, I ended up with a form that indicated I was the sole account owner, when in fact, it was our joint account which exceeded the $10k. Maybe I answered their questions wrong....?

The FBAR instructions say the following:

A spouse having a joint financial interest in an account with

the filing spouse should be included as a joint account owner

in Part III of this report. The filer should write (spouse) on

Line 26 after the last name of the joint spousal owner. If the

only reportable accounts of the filer’s spouse are those

reported as joint accounts, the filer’s spouse need not file a

separate report. If the accounts are owned jointly by both

spouses, the filer’s spouse should also sign the report

So, unlike Turbotax, I filled out Part III, ignored Part II (which TT had filled in), and had both our signatures in the sig block. Then, shiitcanned the TT form.

Did anyone else notice this (this year too)? Or did I somehow miss a "joint" question from Turbotax?

Anyway, again, no big deal. The Feds don't care. I bet you could fill it in with complete gibberish -- and it would still just get filed under your SSN somewhere, without further ado.

[futureexpat10]

The failure to file the FBAR is a felony for each year that the FBAR is not timely filed. In addition, the failure to report income of foreign accounts can constitute the crime of tax evasion.

In addition to criminal prosecution, the IRS imposes civil penalties for failure to file the FBAR. The civil penalty is 50% of the value of the account each year that the FBAR is not filed.

This is the most draconian tax law I've ever heard of!

So, if I'm earning a modest income teaching English in Thailand and it's below the amount that would normally have to be reported, I would be considered a criminal and subject to having my account "stolen" by the feds if I don't file the FBAR with an account in the equivalent of $10,000? Even if the interest is a few baht or zero?

Is there a list of countries that do not have the "double tax treaty" with the US?

Yes, I remember UBS and that they violated the Swiss banking laws by handing over their customers account information.

Edited March 6, 2011 by futureexpat10

[Langsuan Man]

This is the most draconian tax law I've ever heard of!

So, if I'm earning a modest income teaching English in Thailand and it's below the amount that would normally have to be reported, I would be considered a criminal and subject to having my account "stolen" by the feds if I don't file the FBAR with an account in the equivalent of $10,000? Even if the interest is a few baht or zero?

Is there a list of countries that do not have the "double tax treaty" with the US?

Yes, I remember UBS and that they violated the Swiss banking laws by handing over their customers account information.

Fill out the form or split your "modest income" between two Thai bank accounts, thus eliminating the reporting requirement

As a US taxpayer I have no problem with the USG making sure that the fat cats are not able to hide their income in foreign bank accounts, even if it means I have to fill out a form once a year

[JimGant]

split your "modest income" between two Thai bank accounts, thus eliminating the reporting requirement

Nope.

No report is required if the aggregate value of the accounts

did not exceed $10,000.

So, it's the aggregate of all your accounts. If all those accounts, however, are tied together under one thread -- like on-line banking -- just treat as one entity, using the on-line banking ID, since a specific account number is not required. (Sure beats having to fill out an individual block on the form for each account.)

Account number or other designation

[Langsuan Man]

split your "modest income" between two Thai bank accounts, thus eliminating the reporting requirement

Nope.

No report is required if the aggregate value of the accounts

did not exceed $10,000.

So, it's the aggregate of all your accounts. If all those accounts, however, are tied together under one thread -- like on-line banking -- just treat as one entity, using the on-line banking ID, since a specific account number is not required. (Sure beats having to fill out an individual block on the form for each account.)

Account number or other designation

100% correct

[MickeyM]

Revised Form (March 2011) with instructions:

http://www.irs.gov/p...-pdf/f90221.pdf

From the stated exemptions in the instructions, it appears that accounts with international institutions (must be also US based) are excluded from the reporting requirement. This would appear to include HSBC, CitiBank, etc.

[Langsuan Man]

Revised Form (March 2011) with instructions:

http://www.irs.gov/p...-pdf/f90221.pdf

From the stated exemptions in the instructions, it appears that accounts with international institutions (must be also US based) are excluded from the reporting requirement. This would appear to include HSBC, CitiBank, etc.

Please qualify where it states international banks such as HSBC, CitiBank etc. are exempt

If you are referring to Page 6,Exceptions, Paragraph 5 International Financial Institution

it reads:

A foreign financial account of any international financial institution (if the United States government is a member) is not required to be reported by any person

This refers to international financial institutions such as the IMF, World Bank, International Finance Corporation, etc. not banks that have international branches

[Lost in LOS]

The Republic of America.......cannot escape them

[MickeyM]

Revised Form (March 2011) with instructions:

http://www.irs.gov/p...-pdf/f90221.pdf

From the stated exemptions in the instructions, it appears that accounts with international institutions (must be also US based) are excluded from the reporting requirement. This would appear to include HSBC, CitiBank, etc.

Please qualify where it states international banks such as HSBC, CitiBank etc. are exempt

If you are referring to Page 6,Exceptions, Paragraph 5 International Financial Institution

it reads:

A foreign financial account of any international financial institution (if the United States government is a member) is not required to be reported by any person

This refers to international financial institutions such as the IMF, World Bank, International Finance Corporation, etc. not banks that have international branches

[MickeyM]

Revised Form (March 2011) with instructions:

http://www.irs.gov/p...-pdf/f90221.pdf

From the stated exemptions in the instructions, it appears that accounts with international institutions (must be also US based) are excluded from the reporting requirement. This would appear to include HSBC, CitiBank, etc.

Please qualify where it states international banks such as HSBC, CitiBank etc. are exempt

If you are referring to Page 6,Exceptions, Paragraph 5 International Financial Institution

it reads:

A foreign financial account of any international financial institution (if the United States government is a member) is not required to be reported by any person

This refers to international financial institutions such as the IMF, World Bank, International Finance Corporation, etc. not banks that have international branches

What is your reference for this definition? In general I would consider HSBC an International Financial Corporation - Is there some more specific clarification? In my case my USA HSBC account is linked to my Thailand HSBC account ; seems like that should satisfy the intent of this without reporting. What am I missing?

[Langsuan Man]

Why would you think that

the United States government is a member

of HSBC ?

Don't report your Thailand HSBC account at your own peril

Do a Google search on the term International Financial Institution and see what you get

[MickeyM]

Why would you think that

the United States government is a member

of HSBC ?

Don't report your Thailand HSBC account at your own peril

.

Do a Google search on the term International Financial Institution and see what you get

I did not say HSBC was a member of the US Govt. Only that it is an IFI based on a common English definition of those words.

Do a search on International Financial Institutions HSBC and see what you get.

Ex: "As one of the leading international financial institutions, HSBC........."

However, I suspect in this case, you are probably right - commercial banks are not included in this case. Examples in the instructions would certainly help here.

Edited April 6, 2011 by MickeyM

[OriginalPoster]

Has anyone ever been prosecuted for not filing a FBAR report?

[flying]

What timing eh?

* APRIL 7, 2011, 1:15 P.M. ET PRESS RELEASE: Justice Department Asks Court to Allow IRS to Seek HSBC India Bank Account Records

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Thursday, April 7, 2011

Justice Department Asks Court to Allow IRS to Seek HSBC India Bank Account Records

Records Would Be Used to Identify U.S. Residents Who Evade Paying Federal Taxes

WASHINGTON - The United States is seeking an order from a federal court in San Francisco authorizing the Internal Revenue Service (IRS) to request information from HSBC Bank USA, N.A. about U.S. residents who may be using accounts at The Hong Kong and Shanghai Banking Corporation in India (HSBC India) to evade federal income taxes, the Justice Department announced today.

The government filed a petition with the court to allow the IRS to serve what is known as a "John Doe" summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown. If approved, the John Doe summons would direct HSBC USA to produce records identifying U.S. taxpayers with accounts at HSBC India, many of whom are believed by the government to have hidden their accounts from the IRS.

According to documents filed with the government's petition, on Jan. 26, 2011, a grand jury in Newark, N.J., indicted Vaibhav Dahake of Somerset, N.J., charging him with conspiracy to defraud the United States by using undeclared accounts in the British Virgin Islands and at HSBC India to evade his income taxes. According to those documents, employees of HSBC Holdings plc and its affiliates operating in the United States assured Dahake that accounts maintained in India would not be reported to the IRS.

The government alleges that, according to HSBC's website, in 2002 HSBC India opened a "representative office" at an HSBC USA office in New York City to enable "Non-Resident Indians" (NRIs) living in the United States to open accounts in India. In 2007, HSBC India allegedly opened a second representative office at an HSBC USA office in Fremont, Calif., purportedly "to make banking transactions more convenient for the NRI community based in California." Although HSBC India closed those offices in June 2010, the government alleges that NRI clients may still access their accounts at HSBC India from the United States. According to the petition documents, NRI clients have told IRS investigators that NRI representatives in the United States assured the clients that they could invest in accounts at HSBC India without paying U.S. income tax on interest earned on the accounts and that HSBC would not report the income earned on the HSBC India accounts to the IRS.

"The Department of Justice is committed to ensuring that all U.S. taxpayers meet their obligations to declare and pay taxes on foreign bank accounts," said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department's Tax Division. "The ability to hide accounts in foreign countries is rapidly dwindling. We will continue working hand-in-hand with the IRS to enforce the tax laws against those who are using offshore accounts - wherever they are located - to evade taxes."

"The IRS continues to focus its attention on international tax evasion," said IRS Commissioner Douglas Shulman. "This summons request is focused on obtaining more information to help us determine if additional actions are needed. As I've said all along, our international efforts are not about just one country or one bank - it's about our wider effort to ensure compliance with the nation's tax laws."

Federal law requires U.S. taxpayers to pay federal income taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.

Additional information about the offshore compliance initiative of the Justice Department's Tax Division, including its enforcement efforts against Swiss bank UBS AG, is available here.

The thing I do not understand about this is.......

The article say's...

The government alleges that, according to HSBC's website, in 2002 HSBC India opened a "representative office" at an HSBC USA office in New York City to enable "Non-Resident Indians"(NRIs) living in the United States to open accounts in India.

Yet the claim is the US demands info on US citizens? Are non residents/ non citizens being prosecuted? Or is this their IRS foot in the HSBC door?

Edited April 7, 2011 by flying

[flying]

Has anyone ever been prosecuted for not filing a FBAR report?

In August 2009, Swiss banking giant UBS agreed to give American authorities the names of nearly 4,500 U.S. citizens who had opened bank accounts there. The IRS has since convicted scores of people for failing to pay taxes over billions of U.S. dollars.

Edited April 7, 2011 by flying

[OriginalPoster]

Has anyone ever been prosecuted for not filing a FBAR report?

In August 2009, Swiss banking giant UBS agreed to give American authorities the names of nearly 4,500 U.S. citizens who had opened bank accounts there. The IRS has since convicted scores of people for failing to pay taxes over billions of U.S. dollars.

http://www.thaivisa....ost__p__4342331

Maybe I should have phrased my question differently. I know that people have been prosecuted for evading taxes by hiding their money offshore, but has anyone ever been prosecuted for failing to file a FBAR report when they were not evading taxation? I think that there are probably a lot of people who never heard of FBAR and never filed a report on their foreign bank accounts and yet paid all of their taxes in accordance with IRS regulations. Have any of them ever been prosecuted?

[Langsuan Man]

Has anyone ever been prosecuted for not filing a FBAR report?

Usually they get you for both failing to declare on the FBAR and avoiding the taxes, see

http://www.taxproblemattorneyblog.com/2011/03/failure-to-claim-income-from-s.html

[ProThaiExpat]

I only started filing my FBAR form three years ago after 10 years not knowing of the requirement.

I studied the form instructions more than once since I have 22 accounts overseas, some not over the 10k amount.

The instructions refer to accounts in the plural and my interpretation is that regardless of the amount in the account, if you have more than 10K USD equivalent in the aggregate overseas at any time during the year, you must report every account regardless of the amount in it.

As you will see in the form, there is a section asking for you to indicate if the account has less than 10K, more that 10K to 100K etc. This supports my interpretation that individual accounts must be reported even if they have less than 10k in them at any time during the year if the aggregate of all your overseas accounts exceeds 10kUSD.

I wished it was otherwise. I do put the individual account information but when it comes to the personal information requested for every account listed, I just write "ditto" boldly across the sections requesting repetitive personal information.

I question if this information is used by the Department of Treasury but is filed in such a way that targeted individual's reports can be accessed. Thus the correct way to fill out the forms may never be known.

[flying]

Illegal Offshore Account Holders

Slide show at link above

Nearly a half-million Americans have a painful decision to make by Aug. 31 — admit to the IRS that they’ve been hiding secret offshore bank accounts, or take their chances that the government won’t find out and possibly send them to jail.

For many, it’s not an easy choice. To take advantage of the amnesty program – the second one it has offered, though the IRS says it will be the last -- the U . S . government is asking account holders to pay a steep penalty: 25 percent of the highest value of the account in recent years.

The U.S. government has prosecuted dozens of clients of secret Swiss and other offshore banks since its investigation began in 2009 . B ut recently the government opened a second front in its war on global bank secrecy by filing a so-called “John Doe summons” against HSBC. The summons demands the names of U.S. residents who may have been avoiding taxes with undisclosed accounts at HSBC in India.

A U.S. taxpayer who has an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 is required to disclose the existence of the account on his or her individual income tax return. A U.S. taxpayer must also disclose the existence of the account by filing an FBAR with the U.S. Treasury.

With an estimated 500,000 U.S. residents out there failing to disclose offshore accounts and the government turning up the heat, chances are that many will eventually be identified and prosecuted.

So, who are the offshore account holders that have already been caught and how did they operate their tax haven accounts? Click ahead for the details.