FBAR delinquent

[thaisomchai]

I have browsed existing forums here for an hour now and not found an updated post, or a personal experience or clear advice on the best policy to follow regarding delinquent FBARs.

I can not be the ONLY American here who somehow missed this FBAR thing.

I always file my US income tax return on time and dont owe any taxes. I do my own. Its a simple return. . that's how I missed the FBAR.

I have been here for many years.

I filed my first FBAR last night online and got it confirmed. I filed as soon as I realized that I needed to do so.

Big question: should I file for previous years or just let sleeping dogs lie?

Thanks for any help.

[maphraw]

I can only tell you about my own experience. I just found out about FBAR in late 2013. I don't have any idea how I would have known about the FBAR thing except for reading these boards. I filled out my first FBAR in March of 2014. There was a box, if I remember correctly, where I checked "didn't know I had to file". I had never included my Thai bank account interest on my US tax returns before either, despite having more than $10,000 in joint accounts with my Thai wife (who has a tax number issued by the IRS). The interest was so low that I never thought about including it on my US tax returns. We also have a Thai mutual fund which pays substantial dividends but I had never included them before on my US Tax returns either. I just never thought about it. After filling out my first FBAR and submitting it electronically, I went to an accountant in Bangkok and had him do my returns. I wanted our US tax return to look real professional and I wanted his advice. He told me that I can write a letter, maybe it is a standard form you download, explaining why I failed to submit my FBAR for the years from 2008-2012. Out of the goodness or their heart, the IRS might forgive me and allow me start filing the FBAR without fear of penalty if there was sufficient reason for failing to comply with the FBAR regulations. He then recommended filling my 2013 US tax return and include Thai bank interest and mutual fund dividends as if I had been doing it all along and not notify FBAR of anything. He felt I wasn't a big enough fish for them to penalize me and that I would probably pass under their radar unnoticed. The thing is I wouldn't have owed any taxes on my Thai assets anyway since my earned income in Thailand is exempt from US taxes (form 2555) and my Thai dividends and interest doesn't amount to anything that could be illegitimately taxed by the IRS.

There is an awful lot of paranoia on these boards about failing to submit a FBAR. I have four bank accounts in Thailand and not one of the banks has sent the W-9 form for me to fill out. I filled out a W-9 form which the Thai mutual fund sent me and when I called and asked them what information they provided the IRS or Treasury Dept. about my mutual fund they told me they don't send the information to the USA. They send it to the Bank of Thailand which in turn sends it on to the Treasury Dept in the USA. The mutual fund company then told me they have yet to provide any info about my mutual fund to the Bank of Thailand despite the fund being worth more than $10,000.

So the bottom line is that I have filed my 2013 and 2014 tax returns and FBAR and included all of my Thai assets as if I have being filing them since 2008. Maybe I'll get busted. But I doubt it. I think the IRS is looking for tax evaders with really big bucks. But if you haven't done the FBAR before you should start now and decide if you want to tell them why you have failed to file the FBAR prior to 2015. Or just file as if you have been filing all along.

Let us know what you decide.

[thaisomchai]

Mapraw . . .thank you SO much for your post.

My situation is so similar to yours and learning about your experience is very VERY helpful as you are about a year ahead on this in having filed your 2013 and 2014 FBAR.

I just filed my 2014 FBAR . . .just as if I had been doing it all along. I made no mention of failing to file for previous years.

Now I am considering filing my 2013 FBAR and mentioning (in the box provided for it) that I failed to file previously because I just did not know about FBAR.

I am at Siam Commercial and Kasikorn and neither . . .that I remember. . .has asked for a W-9 to be filed. . .unless it formed part of the paperwork when I opened the accounts years ago.

Anyway. . thanks for posting on this. So many times on these kinds of forums responses are off topic or unhelpful.. . .

[Pib]

From here on out I would just ensure you always file the FBAR when required and always include "all" your worldwide income including bank account interest on your tax returns. Beyond that let sleeping dogs lie.

[taxout]

You'll also want to check whether you answered the question at the bottom of Schedule B, Form 1040 correctly. Note that it asks about any non-U.S. account, whether or not you meet the US$10,000 FBAR filing requirement.

[thaisomchai]

Thanks everyone who responded here to what must be a fairly common situation. They seem to have sneaked this law in and I suppose it is too much to ask that they inform everyone. I do my own taxes and manage my own finances so I didn't have a lawyer or tax firm to alert me. An IRS notice would have been nice. ..anyway. . . what I finally did was file a revision for 2014 on time and write a note in the space provided for late filing to the effect that I did not file for previous years because I didn't realize that I had to. I figure that since this is an on time filing, they may not read my note at all, but the note will show that I am not trying to hide anything. I am also a very small fish here with less than $50,000 total involved. I understand that the law is aimed at the big guys so hopefully I will be OK.

Edited July 2, 2015 by thaisomchai

[Pib]

Thanks everyone who responded here to what must be a fairly common situation. They seem to have sneaked this law in and I suppose it is too much to ask that they inform everyone. I do my own taxes and manage my own finances so I didn't have a lawyer or tax firm to alert me. An IRS notice would have been nice. ..anyway. . . what I finally did was file a revision for 2014 on time and write a note in the space provided for late filing to the effect that I did not file for previous years because I didn't realize that I had to. I figure that since this is an on time filing, they may not read my note at all, but the note will show that I am not trying to hide anything. I am also a very small fish here with less than $50,000 total involved. I understand that the law is aimed at the big guys so hopefully I will be OK.

Sneak the law in???...it's been around for decades. And the IRS instructions and forms have talked FBAR for many years. Even tax software such as TaxAct and TurboTax raise the FBAR/foreign accounts question to you when using the software to complete your tax return.

The FBAR's beginnings were the Bank Secrecy Act of 1970. Read the PDF document at this Link for background/history on the FBAR.

I'm sure you will be fine unless maybe you haven't been reporting foreign income such as bank interest from a Thai bank on your federal return and they just want to make an example of a little guy which if I was a betting man they won't.

[thaisomchai]

Thanks PIB. . . .but they snuck the law in on me thats for sure and I am seeing others in the same boat as I look around. It is probably a constant as people move out of the country and have to deal with it. As I say, I do my own tax return and have for many years without problems. I decalre all that I need to declare and it is a very simple return. I dont feel I should have to pay for tax software to complete my return and I file a paper return for both state and federal taxes. OK Had I shelled out the bucks for a tax preparer every year, I would have known. But surely I am not the only American who does my own tax return and who thereforen just would not know or realize what FBAR is.

You know PIB. .. I checked form 1040 and 2555EZ and neither one mentions FBAR. 2555 is a form for Americans living abroad. How difficult would it have been for the IRS/Treasury Dept to add a note to Americans living abroad and possibly affected by FBAR telling them of the FBAR law? Maybe an annual email reminder notice from our embassy? Too much to ask?

I have found the online tax prep companies to be shysters. I tried one once. . .a well advertised "free" offer to use the software and send it to the IRS electronically. Trustingly filled out the entire return and at the end it "locked up" and asked for a ridiculous fee to send it on or even let me copy it. As for buying tax return prep software . .not even sure where to go or if I want to shell out big bucks for one. I have a simple return and now that I know about FBAR I can do it myself.

[Pib]

1040 instructions, page 20 states you must complete Sch B if having a foreign account:

Sch B, Part III talks submission of the FBAR

Since the 2555EZ form is just a Foreign Income Exclusion "attachment" to be filed with the main 1040 tax return, then 1040 instructions apply as talked above.

[skatewash]

Thanks PIB. . . .but they snuck the law in on me thats for sure and I am seeing others in the same boat as I look around. It is probably a constant as people move out of the country and have to deal with it. As I say, I do my own tax return and have for many years without problems. I decalre all that I need to declare and it is a very simple return. I dont feel I should have to pay for tax software to complete my return and I file a paper return for both state and federal taxes. OK Had I shelled out the bucks for a tax preparer every year, I would have known. But surely I am not the only American who does my own tax return and who thereforen just would not know or realize what FBAR is.

You know PIB. .. I checked form 1040 and 2555EZ and neither one mentions FBAR. 2555 is a form for Americans living abroad. How difficult would it have been for the IRS/Treasury Dept to add a note to Americans living abroad and possibly affected by FBAR telling them of the FBAR law? Maybe an annual email reminder notice from our embassy? Too much to ask?

I have found the online tax prep companies to be shysters. I tried one once. . .a well advertised "free" offer to use the software and send it to the IRS electronically. Trustingly filled out the entire return and at the end it "locked up" and asked for a ridiculous fee to send it on or even let me copy it. As for buying tax return prep software . .not even sure where to go or if I want to shell out big bucks for one. I have a simple return and now that I know about FBAR I can do it myself.

I would say things have gotten better in the online tax preparation department. I don't dispute your experience in the past, but I would recommend you try this route again. I particularly recommend TaxAct and TurboTax, but there are others.

[watcharacters]

Just saw your topic today. Hope this helps someone.

Correcting Common FBAR Errors

Currently, the IRS offers four options to fix FBAR mistakes. Participation in the two formal disclosure programs is permitted only if the funds held in the foreign financial account(s) are from a legal source (and not the proceeds of an illegal activity) and if the IRS is not already in a position to know of the person’s non-compliance.

1. File an Amended FBAR

According to the FBAR instructions, a person who previously filed an FBAR but mistakenly provided incomplete or inaccurate information on the Form is required to file an amended FBAR.41 FinCEN Form 114 includes a box for providing a brief explanation of the error. Because of the six-year statute of limitations, a filer need not correct an error on an FBAR filed more than six years ago.

[arunsakda]

I only heard about it a couple years ago also. One of the boxes to check on the online report for why you did not file before is "Did not know".

Thats' what I checked and so far no Black helicopters or knocks on the door whilst in US territory.

[GinBoy2]

I 'think' there is a lot of overreaction to FBAR. Granted, the way Washington works it wouldn't surprise me in the least if suddenly they found some little guy to pursue for a show trial.

But I'm assuming, or maybe hoping, that the purpose was to stop the oligarchs stashing their $B in hidden offshore accounts, rather that to hunt down a few poor expats making a measly 1.5% on their savings.

So, file on an ongoing basis, and for the past let sleeping dogs lie.

On a side note, it was only last week the Thailand & the US actually signed a mutual financial transparency accord, so I think the past is probably fine, and you can sleep easily in your bed

[gt162]

I think you are one of many. FBAR and FATCA is pain in the ass.