Americans: Major Fbar News, E-Filing Now Possible And Set To Become Required In 2013

[Jingthing]

Many of us for years now have been wondering/whining about why you can't file FBAR's electronically.

FBAR is the requirement for Americans to report foreign financial holdings IN AGGREGATE over 10K USD during any previous tax year, for even a moment.

The penalties for not filing are shockingly harsh, if you don't know already. This is not to be ignored.

Well, now you CAN efile the reporting form.

In fact, you will be required to e-file FBARS (if you need to file them in the first place) instead of mailing the paper form starting July 1, 2013.

For the current FBAR due June 30, 2012 covering the tax year of 2011, you can choose to e-file OR mail in the paper form.

While FBAR's are a dreary topic indeed, I suppose this can be seen as good news. E-filing is convenient and obviously more secure considering the mail service.

The news. OK, the original link is from 2011 but I don't recall this news being announced here before:

http://www.greenback...ling-postponed/

http://www.china-bri...bar-filing.html

The website to efile your FBARs:

http://bsaefiling.fi...Individual.html

Edited June 7, 2012 by Jingthing

[Jingthing]

I want to be more precise about who is required to file FBAR.

What I originally said

FBAR is the requirement for Americans to report foreign financial holdings IN AGGREGATE over 10K USD during any previous tax year, for even a moment.

may be misleading.

To understand who needs to file, you need to know that you need to add the HIGHEST amount that each account reached in ALL your foreign account for the year in question, and if that is over 10K USD, you need to file FBAR. If not, you don't. That maximum doesn't need to occur at the same moment so that's why this correction.

For example:

Account 1: Maximum of 7000 USD on Jan 15, then spend down to 10 dollars on Jan 16 where it stays all year

Account 2: 10 dollars all year, then 3010 USD on Dec 31

Add 7000 plus 3010 = $1010, need to file FBAR

Edited June 7, 2012 by Jingthing

[thaigold]

Yep...The American investment banks ripped off the US taxpayer for billions and no one went to jail. Yet an astute American, with a measly 100K in negotiable assets overseas, needs to make FUBAR report like a silly little school boy or girl.

Many expats ignore these draconian edicts with aplomb. All it takes is an experienced tax attorney and a little American backbone.

[meand]

I keep all my money buried in my back yard. After I get into it and cover it back up, the same 2 words always come out of my mouth as I look down at the fresh dirt -- "tax that".

[Jingthing]

Yep...The American investment banks ripped off the US taxpayer for billions and no one went to jail. Yet an astute American, with a measly 100K in negotiable assets overseas, needs to make FUBAR report like a silly little school boy or girl.

Many expats ignore these draconian edicts with aplomb. All it takes is an experienced tax attorney and a little American backbone.

The FBAR reporting requirement is 10K USD, not 100K USD. This isn't a tax matter per se. It's a reporting requirement. They're after not only tax cheats but criminal activity. No I don't "support" these draconian reporting requirements, but frankly I don't think this is really the place to encourage people to ignore these laws. For most law abiding US citizens they are much better off just complying.

[dave_boo]

Thanks for the heads up Jingthing.

[JimGant]

FBAR is the requirement for Americans to report foreign financial holdings IN AGGREGATE over 10K USD during any previous tax year, for even a moment.

In aggregate -- at the same time. Not cumulative over the year.

Account 1: Maximum of 7000 USD on Jan 15, then spend down to 10 dollars on Jan 16 where it stays all year

Account 2: 10 dollars all year, then 3010 USD on Dec 31

Add 7000 plus 3010 = $1010, need to file FBAR

Max amount, at the same time all year, was $7000 on Jan 15. Thus, no FBAR required.

[lanny]

No, that is not true. It is the aggregate of the highest balances of individual accounts that determines when you have to file the FBAR.

Jingting's post is correct, the FBAR is required.

[TongueThaied]

I keep all my money buried in my back yard. After I get into it and cover it back up, the same 2 words always come out of my mouth as I look down at the fresh dirt -- "tax that".

I'm with you, except, the problem is, those of us that must have 400,000 baht banked for two months to get the marriage extension, or 800,000 for retirement, are fuc_ked.

[TongueThaied]

Yep...The American investment banks ripped off the US taxpayer for billions and no one went to jail. Yet an astute American, with a measly 100K in negotiable assets overseas, needs to make FUBAR report like a silly little school boy or girl.

Many expats ignore these draconian edicts with aplomb. All it takes is an experienced tax attorney and a little American backbone.

What's "American backbone"?

[TongueThaied]

Yep...The American investment banks ripped off the US taxpayer for billions and no one went to jail. Yet an astute American, with a measly 100K in negotiable assets overseas, needs to make FUBAR report like a silly little school boy or girl.

Many expats ignore these draconian edicts with aplomb. All it takes is an experienced tax attorney and a little American backbone.

The FBAR reporting requirement is 10K USD, not 100K USD. This isn't a tax matter per se. It's a reporting requirement. They're after not only tax cheats but criminal activity. No I don't "support" these draconian reporting requirements, but frankly I don't think this is really the place to encourage people to ignore these laws. For most law abiding US citizens they are much better off just complying.

One more time, what is "American backbone"?

[craigt3365]

Yep...The American investment banks ripped off the US taxpayer for billions and no one went to jail. Yet an astute American, with a measly 100K in negotiable assets overseas, needs to make FUBAR report like a silly little school boy or girl.

Many expats ignore these draconian edicts with aplomb. All it takes is an experienced tax attorney and a little American backbone.

And how much of that 100k would an experienced tax attorney require to get you off the FBAR reporting requirement? 20k+ I would assume. Not a good way to go.....

[craigt3365]

P.S. Thanks JT for keeping us up to date on this. It's appreciated for sure.

[JimGant]

It is the aggregate of the highest balances of individual accounts that determines when you have to file the FBAR.

If on any of the year's 365 days does the aggregate of all your foreign accounts exceed $10k -- then you need to file the FBAR. Otherwise, no requirement.

Sending $9999 every month to Thailand, spending all of it before the next's month input, says you'll never have over $10k on any single day of the year. Whether this is sent to just one account -- or twelve -- is immaterial. Thus, no FBAR required.

[JimGant]

I'm with you, except, the problem is, those of us that must have 400,000 baht banked for two months to get the marriage extension, or 800,000 for retirement, are fuc_ked.

Fuc_ed how? This is merely a reporting requirement, not a tax form filing. Yeah, that you might have interest earnings on this 400/800k baht of bank account money might become obvious to the Feds. So just declare this interest on your 1040. Christ, what's so hard about being in accord with our tax laws?

[Sateev]

It is the aggregate of the highest balances of individual accounts that determines when you have to file the FBAR.

If on any of the year's 365 days does the aggregate of all your foreign accounts exceed $10k -- then you need to file the FBAR. Otherwise, no requirement.

Sending $9999 every month to Thailand, spending all of it before the next's month input, says you'll never have over $10k on any single day of the year. Whether this is sent to just one account -- or twelve -- is immaterial. Thus, no FBAR required.

The actual language in the TD F 90-22.1 instructions is:

If the aggregate of the maximum account values exceeds $10,000, an

FBAR must be filed. An FBAR is not required to be filed if the person did

not have $10,000 of aggregate value in foreign financial accounts at any

time during the calendar year.

It would appear that the last sentence precludes filing if, on any given day, the total did not reach $10,000.

I think the general language used in the section "Who must file", is vague and misleading, but the instructions seem to make it clear.

Edited June 8, 2012 by Sateev

[lovetotravel]

I'm with you, except, the problem is, those of us that must have 400,000 baht banked for two months to get the marriage extension, or 800,000 for retirement, are fuc_ked.

Fuc_ed how? This is merely a reporting requirement, not a tax form filing. Yeah, that you might have interest earnings on this 400/800k baht of bank account money might become obvious to the Feds. So just declare this interest on your 1040. Christ, what's so hard about being in accord with our tax laws?

I couldn't imagine total taxes on it for a short period of time would be much more than 1000 Baht.

[lovetotravel]

JT's link to the China website says the following:

As we reported last month, U.S. nationals who have financial interest in or signature authority over financial accounts – including bank, securities or other types of financial accounts – in a foreign country must file an FBAR form if the aggregate value of these financial accounts exceeds US$10,000 at any time during the calendar year.

Interesting I'm getting my tax updates from a China based news source! Too funny.

[lovetotravel]

And from the IRS:

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. See also Notice 2010-23.

http://www.irs.gov/businesses/small/article/0,,id=210244,00.html#FR2

[Jingthing]

The clue for this is when you DO file an FBAR you must report the maximum value of each account at ANY point in the year. I STILL think what I concluded is correct, that you add the maximum value of each account at ANY point in the year, and if that exceeds 10K USD, then you must file. I understand the controversy but believe it or not, I don't think the language from the IRS proves that I'm wrong in the CONTEXT of the rules for filing. I reckon this doesn't apply to many people as most people would be below 10K or above it based on EITHER readings of this rule, but it would be useful for a tax expert type to comment about this controversy here.

Edited June 8, 2012 by Jingthing

[lannarebirth]

The clue for this is when you DO file an FBAR you must report the maximum value of each account at ANY point in the year. I STILL think what I concluded is correct, that you add the maximum value of each account at ANY point in the year, and if that exceeds 10K USD, then you must file. I understand the controversy but believe it or not, I don't think the language from the IRS proves that I'm wrong in the CONTEXT of the rules for filing. I reckon this doesn't apply to many people as most people would be below 10K or above it based on EITHER readings of this rule, but it would be useful for a tax expert type to comment about this controversy here.

It's really a stupid form which I filled out last month. I think I had 4 accounts over 10k, but it all stemmed from the same transfer into one account. It doesn't give an accurate description of one's foreign finances at all.

Edited June 8, 2012 by lannarebirth

[TongueThaied]

I'm with you, except, the problem is, those of us that must have 400,000 baht banked for two months to get the marriage extension, or 800,000 for retirement, are fuc_ked.

Fuc_ed how? This is merely a reporting requirement, not a tax form filing. Yeah, that you might have interest earnings on this 400/800k baht of bank account money might become obvious to the Feds. So just declare this interest on your 1040. Christ, what's so hard about being in accord with our tax laws?

You know what, Mr. Apologist for the US Government, it's just too much, that's what. Have you ever heard of the Fifth Amendment? Let's say you did NOT pay all your taxes. This form erquires you to be a witness against youself (rat yourself out). Where does it all end?

I file my 1040's, declare all my income and pay all my taxes. But now, that's not enough. Lucky for me, I read about the FBAR on here a few years ago and have been filing it. But I have a few friends here who knew nothing about it until last year. THEY are fuc_ked. There was an amnesty last year that included a penalty free window for "innocent" FBAR non-filers that had declared all their income and paid all their taxes. But the window closed. Now Treasury has extended the "amnesty" (no criminal prosecution for those who turn themselves in) but the window for innocent non-filers was not reopened. Apparently the penalty for the innocent non-filers is 25% of the highest balance over eight years. For somebody who keeps 400,000 baht in the bank, that comes to 100,000 baht or about $12,698 at current exchange rates. That means my friend who has declared every penny he has earned and paid every penny of tax, but did not know about the FBAR reporting requirment is now faced with the prospect of paying a $12,698 penalty! That's just plain fuc_king wrong.

If it were not for ThaiVisa, I would not know about the FBAR. My tax preparer sends me my tax return every year to review it for accuracy. If I looked closely I would see the box on Schedule B for reporting foreign bank accounts. Then I could download the Form 1040 instruction book and read about the FBAR requirement (I get a PDF vesion of the return from my preparer). But come on, who does all that in practice. When I get my 42 page tax return from my CPA to review for accuracy, I always send it back with a note that says, "Come on, Marge, I don't understand a bit of this; that's why I hire you." She is a very good CPA, but I am her only expat client, so she doesn't ordinarily deal with expat issues; I am usually the one to bring them up to her. For example, she would reasonably assume most of my assets were in the US becasue she knows nothing about the bank balance requirements to maintain certain visas here. It is easy for the FBAR to have innocently fallen through the cracks. I am a retired lawyer, and this stuff confuses me. It's just gotten out of hand. The average schmuck doesn't stand a chance.

Edited June 8, 2012 by TongueThaied

[TongueThaied]

Although I sent a paper FBAR for 2011, I can't know if they got it as I refuse to pay for tracking (used regular mail). So I just filed an electronic version as well, thank you very much Jing Thing. The system is NOT user friendly. It must have taken me over two hours just to go through all the security overkill bullshit. Seems like the feds make a phonomenal effort to protect my privacy, when the only folks I really wish I could protect it from is THEM. What an irony!

I also do not use Adobe Reader, and have not used it for years, as I have a much better program. However, the federal e-filing system forces you to use the Adobe product, so I had to download and install that as well.

Good luck to all my compatriots. Ain't it great to be American! I got a lot of practice bending over and holding my ankles as a kid practicing for a nuclear attack back in the 50's. Jesus, I never thought it would come to this. I'd rather have the Red Scare than this never-ending proctology exam by means of Uncle Sam's very long member.

Edited June 8, 2012 by TongueThaied

[Jingthing]

The clue for this is when you DO file an FBAR you must report the maximum value of each account at ANY point in the year. I STILL think what I concluded is correct, that you add the maximum value of each account at ANY point in the year, and if that exceeds 10K USD, then you must file. I understand the controversy but believe it or not, I don't think the language from the IRS proves that I'm wrong in the CONTEXT of the rules for filing. I reckon this doesn't apply to many people as most people would be below 10K or above it based on EITHER readings of this rule, but it would be useful for a tax expert type to comment about this controversy here.

It's really a stupid form which I filled out last month. I think I had 4 accounts over 10k, but it all stemmed from the same transfer into one account. It doesn't give an accurate description of one's foreign finances at all.

That's an excellent point! I was about to post about that.

Simple example. You've got about 20K USD in Thailand.

You transfer in 20K to open an account. Before the end of the year you close that account and put the 20K in a new account.

You must report BOTH accounts at their maximums, 20K. So superficially it looks like you've got 40K in Thailand!

Of course, when they've got a full view of our Thai accounts they can see all this activity. But superficially it will look like a lot of people have a lot more money than they do, potentially inviting criminal investigations, etc.

[lovetotravel]

Good luck to all my compatriots. Ain't it great to be American! I got a lot of practice bending over and holding my ankles as a kid practicing for a nuclear attack back in the 50's. Jesus, I never thought it would come to this. I'd rather have the Red Scare than this never-ending proctology exam by means of Uncle Sam's very long member.

Woa pardner. The US isn't even in the top 20 with regards to marginal personal tax rates. Most of Europe's got us beat by a mile.

http://en.wikipedia...._By_Country.svg

http://www.businessp...west-tax-rates/

The United States is still relatively tax-friendly, with a marginal tax rate of around 27% on average income workers. As the world’s largest economy by far, the economic vitality and high standards of living in the U.S. speak for themselves. The United States boasts the 6th highest GPD per capita in the world at $47,440 and serves, in the words of Wikipedia, as “the epicenter of world trade.” Total GDP stood at over $14 trillion for 2008, which is more than three times that of the world’s second largest economy (Japan). American citizens also have the highest income per hour worked of any nation surveyed. By any objective measure, the United States and its relatively low tax rates offer the best of both worlds — reasonable social safety nets, and extraordinary economic capacity stemming from essentially free market policies. The standard of living in the US is evidenced by consistently being the most immigrated-to nation on earth — 38,355,000 immigrants currently call the US home, more than double that of Russia, which is second on the list.

Just be glad your not from Belgium!

I'll trade a few hours to do some forms vs. giving more to my government. No brainer.

[JimGant]

Simple example. You've got about 20K USD in Thailand.

You transfer in 20K to open an account. Before the end of the year you close that account and put the 20K in a new account.

You must report BOTH accounts at their maximums, 20K. So superficially it looks like you've got 40K in Thailand!

Certainly open to misinterpretation. But, since the Feds are looking for the peak of your foreign wealth "at any [one] time" -- not a summation of wealth from various times -- you would report the value of all your accounts for the single day that provides the highest aggregate value. Yes, you could report the way you suggest (and if queried, have a good argument that their lunatic instructions led you astray). But, the lower the aggregate amount reported, the less likely some algorithm will raise a flag that Thai interest reported on Schedule B doesn't jive with the large amount reported on your FBAR. Yeah, you could argue that the money just passed through on the way to buying your new car -- and with today's reporting requirements, you could get away with that explanation. However, I'd prefer not to have that conversation.

Really is a stupid form. I filed an earlier version, even tho' I guess I was supposed to file the Jan 2012 version (I saw no difference between the two -- and the older version already had most of the data filled in -- just had to change dates and amounts). Also, to make things easy on us, and since all our accounts are under a single internet account umbrella, I just used a single joint account block to report this internet account, and its aggregate amount. They got all the info they required, namely aggregate amount and SSNs. If they want to see each individual account (but why would they?), they can parse the internet account number provided. But, the chance they'd be interested in this small fry is nil -- so why not make it easy on myself.....

As an aside -- for those who are delinquent in FBAR filing -- I found the following advice interesting:

As for the FBAR. You will be penalized simply for.filing late. Such penalties would apply regardless of whether you file now or wait as they cap out. Since there was no mal intent in the non filing and really nothing to hide, of would not be criminal. So, with everything the way it is, not completing the back FBAR does not have risks that exceed the penalties for currently filing. I would simply do those.going forward.

From a so-called Tax Attorney. See more here:

http://www.justanswe...years-live.html

[Jingthing]

This is getting strange now.

In my example, with 20K in different accounts, different BANKS, I see no ambiguity whatsoever!

You'd be required to report the MAXIMUM amount for EACH of those accounts reached at ANY point during the year. So what choice at all but to report 20K in one bank, and 20K in the other bank, clearly superficially showing 40K in Thailand?

BTW, the form was revised for this year.

What is different/new about the most recent form/requirements?

Also note, another happy happy joy joy factoid about FBAR filing. If you are mailing them (or have in the past) the DUE DATE means the due date, NOT the date you can prove you mailed the form. Reasonable people, eh?

Edited June 8, 2012 by Jingthing

[Gonsalviz]

I spend extra time to make sure I have extracted enough money from my account before I have more transferred just to avoid filing this form. Odd part of this is that if you ever get a call, they have been monitoring you. If they have been monitoring you for petty amounts like most expats in Thailand, ($10,000 is a petty amount) then they also know where it came from and whether taxes have been paid on it or not.

The American government's heavy handed intervention in individual lives that costs more money than could ever be recovered in case there were some cheaters out there.

[Jingthing]

Yeah I'd like to avoid needing to file this form but as a retirement extension qualifier based on 800K baht, my goose is cooked.

[lovetotravel]

JT: I understand your concern, but I think your worrying about it a bit too much. The aggregate value is used to determine if you must file, not how much you have to pay in taxes. IMHO, it's quite easy. If you're over, file. If you are getting interest here and want to be safe with the IRS, report it! It's usually not a significant amount. No big deal.