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[pernod]

What, my fellow, "Land of the Free, Home of the Brave" citizens doing about this?<BR class=yui-cursor id=yui_3_2_0_17_132359491562572>

"If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (

[Jingthing]

We file FBAR forms every year and report any interest from our foreign accounts on our tax returns. Simple. FBAR only needed if the accounts IN AGGREGATE total 10K USD at any point during the previous tax year.

[craigt3365]

We file FBAR forms every year and report any interest from our foreign accounts on our tax returns. Simple. FBAR only needed if the accounts IN AGGREGATE total 10K USD at any point during the previous tax year.

Exactly. If you use one of the major tax software packages, they will do the forms for you automatically. Easy. But for sure do it! As JT has pointed out on other threads, the penalties are huge!

[el jefe]

This comes up every couple of weeks, sometimes more frequently. Like 3 days ago.

Why would you not want to file the FBAR?

[maxman71]

This is pretty much old news, or at least it should be by now. The IRS has conducted two amnesties for reporting offshore accounts, the most recent concluding in Sept. 2011 and the previous one concluded in Oct. 2009.

As for me, I have been in compliance for years on all the IRS offshore bank account reporting requirements. And, if you own at least 10% interest in a foreign company, trust, etc., there are other forms besides the FBAR that are required to be filed. They can be a real pain in the arse to understand and complete for the first time. After that, no big deal.

These amnesties were hardly complete amnesties; penalties were merely reduced, but still very high. Going forward, if the IRS stays to its' word, anyone caught can expect some horrific penalties, and possibly jail time, depending on the circumstances.

The fact is, FBAR reporting has been on the books since 1974, it just hasn't been enforced very much until a few years ago.

An article appeared on CNBC just a couple of days ago that reported some of the woes some US taxpayers have endured in coming forward:

http://www.cnbc.com/id/45617908

The bottom line is this: The US as well as many other developed Western countries are in dire circumstances concerning their sovereign debt and on-going budget deficits. It is estimated that approx. 17% of the US economy is "underground" and skirting taxation. With the ever-growing sophistication and expansion of global banking integration and the ability to obtain and share information digitally, the US is going after previously hidden offshore assets and unreported income. Our Charlatan in Chief, BO, was quoted very early in his administration that he intends to "mine the expats". That's about the only promise he's kept.

I suggest anyone who is just getting word about the IRS' efforts on this topic, do some online searching for further information. And if you are not in compliance, I STRONGLY suggest you engage the services of knowledgeable and competent tax professionals in these US compliance matters to determine your options.

[TongueThaied]

As Americans, we have two choices, bend over and take a small one with grease voluntarily, or stand up for our rights and risk taking a big one with sand later. I know people that have gone both ways. I also know somebody that got the sand treatment when Uncle Sam found his Swiss bank account after the Swiss recently betrayed their depositors. As Uncle Sam loves to make an example, it wasn't pretty.

[maxman71]

As Americans, we have two choices, bend over and take a small one with grease voluntarily, or stand up for our rights and risk taking a big one with sand later. I know people that have gone both ways. I also know somebody that got the sand treatment when Uncle Sam found his Swiss bank account after the Swiss recently betrayed their depositors. As Uncle Sam loves to make an example, it wasn't pretty.

Ultimately, it's the US Citizens themselves who are responsible for what laws get passed by our traitorous Congress and White House. These bank account reporting compliance initiatives got started under Bush II late in is presidency and BO jumped on that bandwagon with all four feet. We as a collective group of voters keep putting into office the same traitorous arseclowns election after election. As long as the laws state that US citizens are subject to filing tax returns and paying taxes on worldwide income, that's the way it is until WE change it via the ballot box. Personally, I have little sympathy for those who seem to believe they should be able to get away with paying no taxes and still reap the benefits; there is no such thing as a Free Lunch. You want a robust Naval presence in Asia??? Pay up. You want your Social Security/Medicare coverage when you reach the age??? Pay up. When you return to the US for a visit or repatriation and do you expect a reasonably well-functioning society??? Pay up. Those who think "someone else" should pay for it while you collect scot-free, should move to Greece. If you want nothing from the US government, then one idea is to renounce your US citizenship and take up citizenship with a country that better matches your ideological beliefs.

[Jingthing]

Avoiding taxation is not considered a legitimate reason to renounce US citizenship by the IRS.

I generally agree we as citizens are responsible for our government. The founders knew that wide participation by citizens was needed to have a beneficial democracy. But be honest, most of us don't even VOTE much less are ideal active citizens.

[tutsiwarrior]

Avoiding taxation is not considered a legitimate reason to renounce US citizenship by the IRS.

I generally agree we as citizens are responsible for our government. The founders knew that wide participation by citizens was needed to have a beneficial democracy. But be honest, most of us don't even VOTE much less are ideal active citizens.

yeah but in practical terms the FBAR reporting requirement is not something that you can do anything about, just like having to pay income tax when you haven't lived in the US for over 20 years and have no connection other than your passport: no property, family, etc...

I was born, raised and educated in the US so maybe I owe something but there is a limit...foreign military adventures and support for pariah states like Israel come to mind...

[dekestone]

Ultimately, it's the US Citizens themselves who are responsible for what laws get passed by our traitorous Congress and White House. These bank account reporting compliance initiatives got started under Bush II late in is presidency and BO jumped on that bandwagon with all four feet. We as a collective group of voters keep putting into office the same traitorous arseclowns election after election. As long as the laws state that US citizens are subject to filing tax returns and paying taxes on worldwide income, that's the way it is until WE change it via the ballot box. Personally, I have little sympathy for those who seem to believe they should be able to get away with paying no taxes and still reap the benefits; there is no such thing as a Free Lunch. You want a robust Naval presence in Asia??? Pay up. You want your Social Security/Medicare coverage when you reach the age??? Pay up. When you return to the US for a visit or repatriation and do you expect a reasonably well-functioning society??? Pay up. Those who think "someone else" should pay for it while you collect scot-free, should move to Greece. If you want nothing from the US government, then one idea is to renounce your US citizenship and take up citizenship with a country that better matches your ideological beliefs.

I agree --and I vote. The problem is there are no representatives for expat Americans. In fact most in USA see us as a source of tax income that has no power base to to vote them out of office -- so they're all quite happy to tax us. (This didn't start with Bush or Obama.)

BTW, besides FBAR you may also have some FATCA reporting responsibilities. It will be interesting to see how that finally kicks in and all banks have to spend vast amounts of money and time reporting to the IRS every account that is held by an American.

http://www.irs.gov/businesses/corporations/article/0,,id=236664,00.html

Edited December 12, 2011 by dekestone

[maxman71]

There is at least one organization that serves as an advocate for US expats:

http://www.aca.ch/joomla/index.php

I think there is at lease one more, but their name escapes me at the moment. There are approx. 5-6 million US citizens living abroad. Properly motivated and organized, they (we) can be a pretty important demographic that politicians won't be able to ignore and push around. Ever-increasing and onerous paperwork and reporting requirements serve as the motivation, and we just need to make better use of existing advocacy groups for getting organized.

In response to JingThings claim that avoiding taxation is not a recognized reason for renouncing citizenship, that is partially true. One must be careful in how they express their reasons for renouncement in interviews with US consular officials and how you fill out paperwork. I have also read that even if you do successfully renounce, the IRS has a 2 year(?) period during which they can "settle" your final tax matters. In essence, it's called an "exit tax" and is much the same thing as when you die and your estate taxes get settled by your heirs, depending on the total marked-to-market value of your worldwide assets.

Another link that reports on the exponential increase in US citizens living abroad who are renouncing their citizenship as a result of the burden of all this crap.

http://blogs.wsj.com/hong-kong/2011/03/10/red-white-and-through/

In closing, BO enjoyed overwhelming support of US expats in the 2008 election; remember all those "Obama Victory Parties" you folks put on and attended??? Then there were guys like me who called out BO for what he was very early on and we were accused of being racists since we failed to see the aura of brilliance of this lying, arrogant, incompetent, lazy, hypocrite, socialist arseclown. Time to WAKE UP, get your heads out of your keesters and get more involved.

[bbradsby]

Avoiding taxation is not considered a legitimate reason to renounce US citizenship by the IRS.

I generally agree we as citizens are responsible for our government. The founders knew that wide participation by citizens was needed to have a beneficial democracy. But be honest, most of us don't even VOTE much less are ideal active citizens.

How quaint. Democracy in America... that's so 20th Century!

[Jingthing]

Avoiding taxation is not considered a legitimate reason to renounce US citizenship by the IRS.

I generally agree we as citizens are responsible for our government. The founders knew that wide participation by citizens was needed to have a beneficial democracy. But be honest, most of us don't even VOTE much less are ideal active citizens.

How quaint. Democracy in America... that's so 20th Century!

Agreed. It is long gone and no tea party or Occupy the Shopping Malls is gonna fix it either. Oh well ...

[dekestone]

There is at least one organization that serves as an advocate for US expats:

http://www.aca.ch/joomla/index.php

I think there is at lease one more, but their name escapes me at the moment. There are approx. 5-6 million US citizens living abroad. Properly motivated and organized, they (we) can be a pretty important demographic that politicians won't be able to ignore and push around. Ever-increasing and onerous paperwork and reporting requirements serve as the motivation, and we just need to make better use of existing advocacy groups for getting organized.

...

Another link that reports on the exponential increase in US citizens living abroad who are renouncing their citizenship as a result of the burden of all this crap.

http://blogs.wsj.com/hong-kong/2011/03/10/red-white-and-through/

Most of those 5-6 million US citizens abroad don't bother to vote and many, many have not filed income tax for many years and want nothing to do with the US. American Citizens Abroad looks like a good group but they're not going to change legislation unless they have a powerful PAC (or maybe buy a senator or two ) Just look at the comments of the WSJ article you linked to to get some idea about the attitude of your average American towards expats. It's basically: "Geez, you guys gotta pay taxes?! While sitting on the beach at Acapulco? Cry me a &lt;deleted&gt; river."

But specifically regarding FATCA, there might be a change if enough foreign banks and financial instituions decided that it's too much of a hassle and too expensive to give in to the demands from the IRS and just opted out of the deal by removing all their investments from the US. I'd love to see that happen. Then the IRS might jump. Unfortunately, something very different is starting to occur. Banks in some countries now refuse to accept funds/ open accounts from Americans. Wonder which way Bangkok Bank is going to go?

[dinger]

We file FBAR forms every year and report any interest from our foreign accounts on our tax returns. Simple. FBAR only needed if the accounts IN AGGREGATE total 10K USD at any point during the previous tax year.

You sound like you might be able to help me with this.

How do you report interest on a long term account that covers 2 taxable years. Do you report and pay tax on the first year and report and file a foreign tax credit the 2nd year. This is my first try at this and I just don't screw anything uo

Thanks for any help

[Jingthing]

We file FBAR forms every year and report any interest from our foreign accounts on our tax returns. Simple. FBAR only needed if the accounts IN AGGREGATE total 10K USD at any point during the previous tax year.

You sound like you might be able to help me with this.

How do you report interest on a long term account that covers 2 taxable years. Do you report and pay tax on the first year and report and file a foreign tax credit the 2nd year. This is my first try at this and I just don't screw anything uo

Thanks for any help

I am not a tax expert which will be clear from my answer anyway.

I have Thai bank account interest every year to report. I report it every year to the bad old IRS. They are long term accounts but you can always get the annualized interest for any account. That is foreign interest. That is not foreign tax paid. I wouldn't think about filing a foreign tax CREDIT on foreign interest income.

I have never filed a Thai tax return. So no credit for tax paid.

I suspect there is more to your question. Sometimes there are expat tax experts who post here.

Edited December 29, 2011 by Jingthing

[JimGant]

I have never filed a Thai tax return. So no credit for tax paid.

But fixed accounts with Thai banks, in my experience, withhold 15% of interest earnings towards Thai taxes. As has been discussed on this forum, for Yanks, who have to report worldwide income, instead of the added hassle of getting this 15% refunded from Thai tax officials, just claim it as a tax credit when you file your US tax return, that includes the Thai interest from which the 15% is withheld. You'll come out in the same position.

How do you report interest on a long term account that covers 2 taxable years. Do you report and pay tax on the first year and report and file a foreign tax credit the 2nd year.

If you're talking about an original issue discount (OID) product. you'd report the imputed interest on your annual 1040, just as you would for an OID US product, such as a zero coupon.bond. And, you could also report accrued Thai income taxes towards a US tax credit -- even if you're a cash basis taxpayer. If you won't be filing Thai taxes, and you know that 15% of the discount paid at maturity will be withheld as Thai taxes -- taking the accrued tax credit in year 1 makes sense.

But, if you're just guessing at the accrual amount of taxes -- and you guess wrong -- you'll be needing to file an amended return.

Depending on how much Thai tax we're talking here (which drives whether or not a Form 1116 need be filed), it might be simpler to wait to to take the tax credit in year 2, when amounts certain are known.

By the way, what Thai OID product are we talking about?

[Jingthing]

But fixed accounts with Thai banks, in my experience, withhold 15% of interest earnings towards Thai taxes. As has been discussed on this forum, for Yanks, who have to report worldwide income, instead of the added hassle of getting this 15% refunded from Thai tax officials, just claim it as a tax credit when you file your US tax return, that includes the Thai interest from which the 15% is withheld. You'll come out in the same position.

Yes, thanks for mentioning that. I am vaguely aware of it. I just ignore that. If you saw my tax returns, you'd understand. Lets just say I am not the solution to the deficit.

[dinger]

I think what Jim Gant said might be the be the way to go. Report this years interest and wait until next year when the account matures and they deduct the 15%. Then apply for the foreign tax credit on my taxes next year for the entire amount