FBAR Misinformation

[JimGant]

http://www.valuewalk.com/2015/06/fbar-mistakes/

If you read the info in the above site, there's a huge error about the trigger amount aggregate requiring a FBAR (FinCEN Report 114) filing.

So first, go back and convert the amounts in each of your bank accounts to dollars using the IRS's official exchange rates.

Then add together the values of all your accounts at their highest points in the year.

If the amount you come up with exceeds $10,000 then you have to report ALL of your foreign accounts.

NO NO NO! The $10,000 reporting threshold is a single moment's snapshot of all your foreign accounts. So, if you have an account with $9,000 at Bangkok Bank, but you close that account, then open another account with that same $9,000 at another bank (or even again at Bangkok Bank) -- the maximum "single moment" amount is only $9,000 (assuming this is the only money you have in a foreign bank(s)). So, no FBAR requirement.

But, if that "single moment" amount does, indeed, exceed $10,000, then every account you have (or had, even if closed) has to be reported, with its highest value during the reporting year. Makes no difference if that highest value is $10, or $100,000. All accounts whether still open or not, have to be reported -- if that "single moment's" snapshot exceeded $10,000 and thus triggered the FBAR filing requirement.

I'm sure this is understood by most US types on this forum, as it's been discussed ad nauseum. However, a few may have the same mistaken idea as this referenced website. Of course, if you don't meet the "single moment" threshold, but mistakenly file anyway, no harm, no foul. Mo' betta than the other way.....

[Thailand J]

I think the website is correct, I have never heard of the " single moment" snapshot idea.

If you take out $9000 from one bank and put it into another, you wil have $18,000 maximum aggregate for the year and therefore you will have to file FBAR.

[JimGant]

the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

That's the official Treasury statement. "At any time" means at any moment, not at any one day, any one week, any one month........ Logic confirms this, because if the max amount you had in Thailand was $9000, but you moved it from bank to bank (or in the same bank, from savings to a fixed account, say), the Feds aren't interested in you -- 'cause you never exceeded $10k "at any time." (But the "single moment" terminology can -- and does -- clarify what "time" means in this context.)

Did you file a FBAR by mistake?

[Thailand J]

It appears that they are looking at aggregare of the peak values. On page 10 of the instruction:

http://www.fincen.gov/forms/files/FBAR%20Line%20Item%20Filing%20Instructions.pdf

Step 1. Determine the maximum value of each account (in the currency of that account) during the calendar year being reported

Step 2. If the maximum account value of a single account or aggregate of the maximum account values of multiple accounts 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 maximum value or aggregate maximum value in foreign financial accounts at any time during the calendar year.

If I have made a mistake, it's not my first and won't be the last.

Edited June 29, 2015 by Thailand J

[gk10002000]

I think the website is correct, I have never heard of the " single moment" snapshot idea.

If you take out $9000 from one bank and put it into another, you wil have $18,000 maximum aggregate for the year and therefore you will have to file FBAR.

No.

[TheAppletons]

I think the website is correct, I have never heard of the " single moment" snapshot idea.

If you take out $9000 from one bank and put it into another, you wil have $18,000 maximum aggregate for the year and therefore you will have to file FBAR.

No....if you take $9000 out of Bank A (close the account) and deposit it into Bank B (new account) the maximum aggregate is not $18000.

[CaptHaddock]

When in doubt, always file the report which always conforms to the law even if not required. Same goes for filing tax returns. Always file.

[GinBoy2]

I think there is some paranoia over this. File the FBAR, it's not hard. But is the DOJ & IRS that interested in the majority of us that have money sitting in Thai bank accounts earning peanuts, probably not.

Unless you have millions of $ parked in some known tax haven, your measly returns on Thai denominated accounts probably aren't going to arouse too much interest.

File the FBAR but don't sweat too much

[Pib]

"At any time" means "any moment in time." And the website is wrong as stated by the OP

If you exceed $10K for one second, even one millisecond as shown by recorded transactions, like you had one account worth $9,990 on 1 July, decided to add $11 worth on 1 July to bring the total up to $10,001, and then 5 minutes later on 1 July decided to withdraw that $11 to get the total back down to $9,990 well you have still exceeded $10K "at any time" during the year. The instructions don't say highest/total amount at the end of the any day, end of the month, etc....it says at any time.

If I had that $9,990 in one account and I wanted move say $1000 of it to a new account...well, if following the web sites guidance I would had a highest value in one account of $9.900 during the year and a highest value of $1,000 in the other account...adding those two highest values up gets me to $10,990 and I would have to file a FBAR. No, incorrect.

"At any time" you still only had $9.990 aggregate because a millisecond "before" the $1000 was deposited in the new account the other account was reduced by $1000...still leaving you with an aggregate highest balance at any point in time of $9,990. One way this can commonly come into play during year if a person is rolling over all the money from a matured fixed account (which usually closes that account) into a new fixed account.

The author of the website article identifies himself as a "...international investor, entrepreneur, permanent traveler, free man..." Me thinks he needs to study up more on the FBAR....but hey, like he says, he's a "free man" and can do what he wants to include giving out wrong information.