US Tax Question - Schedule B

[Rhys]

I just wondered what percentage give the "would not use an excuse, never going back, don't want anything from the USA' response for not complying with IRS... and assorted filing..

I've talked with a few 2-3 and they have stated the don't want anything leave me alone, never going back response.. It usually starts with hey have you filed yet..then the responses flow..

Thanks for the information

[JDGRUEN]

The On Line Tax Reporting Web Sites such as Turbo Tax and many others will walk you right though it ... they have a system that will ask you all the questions and create a 1099 or what ever is needed to report the 7 dollars... it is knock dead easy.

[Pib]

And, some more unhelpful reporting from CNN:

"Under FATCA, the U.S. Treasury has struck agreements with more than 100 countries that require those countries' financial institutions to report back to the IRS on any accounts held by U.S. taxpayers, which include U.S. citizens, people with green cards and U.S. ex-pats."

NO NO NO. There's a $50,000 de minimis threshold for reporting US person accounts. And for 2014, there's no requirement for reporting on existing accounts (those opened before June 30); and for new accounts (after June 30) that exceed the $50k de minimis -- only there existence, but not earnings, is to be reported, at least for 2014.

But, hey, going forward, probably wise to start reporting all your Thai earnings on your US tax return -- it just might be easier to report all US person accounts, not just running a search for de minimis thresholds. And, yes, filing a FBAR, if you qualify.

Just to add some info to above, Jim is "not" talking the federal tax return Form 8938 Statement of Specific Financial Assets talked about in the Sch B instructions regarding foreign accounts which also has a $50K thresheld. For the Form 8938 minimum threshold, the $50K applies to an end of year amount or $75K during anytime of the year if filing a unmarried tax return and living in the U.S....if living overseas like in Thailand it jumps to $100K for an unmarried tax return......and for a joint return in jumps to $200K if living in the U.S. and $400K if living overseas like in Thailand.

However, but for a FATCA/FBAR submission it's a completely different reporting requirement and has a different threshold (and form...the FinCen114) of $10K anytime during the year, and it does not matter if you live in the U.S. or overseas regarding the amount of the foreign account(s)...that $10K threshold applies for your FBAR reporting.

As FYI, See this IRS webpage which compares the From 8938 and FBAR reporting...and below is partial snapshot from that webpage.

And then there is this webpage that gives more specific info about the dollar limits for the Form 8938 regarding single and married folks and whether the live in the U.S. or overseas. Enough talking about the Form 8938 which could be part of your federal tax return.

Back to the $50K Jim mentioned regarding FATCA/FBAR reporting of US person accounts. The $50K Jim mentioned is in reference to reporting requirements of foreign countries/financial institutions under the FATCA agreement with the U.S. IRS. That is, reporting required by foreign financial institutions to the IRS; not any report the individual submits like the FBAR. Like say what Bangkok Bank, K-Bank, SCB, or whatever Thai bank/financial institution must report.

Thailand has agreed with the IRS under the Model 1 Intergoverment Agreement (IGA) dtd 24 Jun 14 to report foreign accounts of U.S. persons. You can review the IGA at the link directly above, but you may want to review Annex 1 of the IGA which spells out the "due diligence reporting requirements of foreign banks" by dollar amounts, by what dates, whether a low or high value account, whether a preexisting account or new account, etc....basically spells out the procedures banks must follow to identify reportable accounts. There you will see that $50K reporting requirement by foreign banks.

Now after reading Annex 1 of the IGA you'll probably have a headache from the lawyer language and maybe feel that as long as I don't have $50K equivalent with any Thai bank they are probably not going to report the account info to the IRS. Well, maybe that will be right...then again maybe it won't because the IGA gives foreign financial institutions some latitude in reporting. Like on Page 2, Para 2A it starts off in saying what accounts do not need to be reviewed/reported Unless the Financial Institution elects otherwise (there is that latitude coming in).

Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting [FATCA Partner] Financial Institution elects otherwise, either with respect to all Preexisting Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in [FATCA Partner] provide for such an election, the following Preexisting Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:

Since this reporting will no doubt be done via retrievals run on the banks accounting database (which are later reported/forwarded to the IRS) and a retrieval can be written to key-in on whatever you ask it to do, what if the foreign bank decides just to report the deposits on all U.S. persons regardless of the amount in their account(s)...even if the account happens to be at zero baht. Basically the bank just reports all U.S. citizen accounts without going to the extra retrieval work of keying on the different reporting thresholds for the different types of accounts. Now you might think the banks might want to only report the minimum thresholds like the $50K, but then again maybe they just report any account with any amount...even zero baht...as it may be less work for them and prevents the chance of them not reporting some accounts that should have been reported.

The reporting/retrieval format is probably already defined under international rules like discussed at the IRS webpage for some FATCA reporting by foreign financial institutions. When looking at the Pub 5124 mentioned at the website it shows one of the data element entries "regarding account amount and what value to report"...the value is defined as the account value or as defined in Annex 1 of IGA...remember the IGA says $50K. With the reporting latitude the banks will have, which "or" criteria will they select? Just any amount or if only at least $5K0 per IGA? I don't know. Maybe I'm reading too much into it.

All of this foreign account reporting, different forms, different trigger amounts, etc., can be very confusing. News media articles on the subject can cause confusion, individual posts like mine can cause confusion, etc. It would be nice if the IRS/U.S. Treasury Dept could just integrate individual FBAR reporting right into the federal tax return and standardize the different threshold reporting amounts versus have separate reporting requirements and forms---but I also know that's probably a simplistic view in light of all possible ways that individuals and companies must report income and file tax returns. With that I close...I'm going to now take a whole bottle of Excedrin as writing this post has caused me huge headache.

[JimGant]

So, don't use the excuse of it was too hard to E-File the FBAR.

As Pib says, it's easy. And FAQ 17, referenced previously, is dated when it says:

NOTE: Taxpayers filing FBARs electronically do not currently have the technological ability to include a statement explaining why the FBARs are filed late

That's changed. The drop down excuse box has an "Other" option you can choose, upon which a box for your explanation appears. Here's where you state, "Yes, I paid tax on all my foreign income but didn't realize I had to file a FBAR." Or, "I didn't make enough money, including foreign income on my bank accounts, to reach the threshold requiring filing a tax return." Whatever.

Apparently, you need to look back 6 years -- and file FBARSs for any of those years where you exceeded $10k. You don't have precise figures for those past years? Just give it your best shot. There is no way those figures, if in the ballpark, will be challenged.

Here's even a better article from Forbes on this subject:

http://www.forbes.com/sites/stephendunn/2014/07/20/all-you-need-to-do-is-file-your-delinquent-fbars/

[Pib]

Regarding the reason for late reporting as Jim mentioned it down has a pull down box where you pick your excuse....and if you don't know the amounts from the current or old accounts you can instead check the block titled Max Account Value Unknown See below.

Edited April 4, 2015 by Pib

[zierf1]

Get your Thai lady to open an account so you don't have to put up with this crap.

[Langsuan Man]

Get your Thai lady to open an account so you don't have to put up with this crap.

Right, once she takes the money and goes back home you won't have to put up with anything, including the money or her

[Pib]

Get your Thai lady to open an account so you don't have to put up with this crap.

Right, once she takes the money and goes back home you won't have to put up with anything, including the money or her

Well, the suggested method is highly recommended by Thai ladies ...even beginning on the first date. They do know how to manage "your" money to best hide meet her your financial and tax needs.