Thai and Cambodian press warn of escalating tensions following Miss Grand scandal

[JimGant]

Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.

The IRS is aware some taxpayers who are dual citizens of the United States and a foreign country [or just expat US citizens] may have failed to timely file United States federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), despite being required to do so. Some of those taxpayers are now aware of their filing obligations and seek to come into compliance with the law. This [below referenced] fact sheet summarizes information about federal income tax return and FBAR filing requirements, how to file a federal income tax return or FBAR, and potential penalties.

IRS Fact Sheet

FS 2011-13

Issued December 2011

Be sure and click on the FBAR link HERE to see the IRS manual on FBARs. Open a beer first, however, if you plan to wade through the "last chance compliance" and "mitigation" passages. Then, plan on an aspirin.

A selected passage:

The examiner must still consider whether a warning letter or a penalty amount that is less than what would be called for under the mitigation guidelines would be more appropriate given the facts and circumstances of a particular case. For example, if an individual failed to report the existence of five small foreign accounts with a combined balance of $20,000 for all five accounts but the income from each account was properly reported and the taxpayer made no effort to conceal the existence of the account, it may be more appropriate to issue a warning letter rather than assert penalties under the mitigation guidelines.

So, if you haven't filed a FBAR -- but should have -- reporting that nitnoy bank interest on your 1040 Schedule B tax return may give you a walk (assuming you decide to back-file a FBAR). However, if you've overlooked reporting that interest -- and haven't filed the required FBARs -- well, you may need two beers to digest your potential situation.

[el jefe]

I'm not giving tax advice. As a CPA, you'll have to pay for that.

Lots of expats have unique situations and may have reasons for hiding their assets and income from the IRS. Some understand the risk and are willing to gamble on the substantial penalties if caught. But for the majority of the expats reading this, the FBAR requirements only relate to their account with 800,000 baht. Why any of those people would be hiding that account and the $50 interest on it is beyond me.