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FBAR - Am I screwed? :(

FBAR - Am I screwed? :(

Old Feb 24th 2014, 5:25 pm
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Unhappy FBAR - Am I screwed? :(

Hello all, thanks for any advice in advance!

I moved to <snip>, and being the fool I am, never knew I had to file back in the states since I have been paying taxes here the whole time. I was told by my employer that since they deal with my taxes I dont even have to file in the UK.

I recently found out about FBAR, and of course I have saved some money over the past years here and now am very worried that they will take all my savings and/or apply criminal charges. I have had over £10k in my UK account for at least the last x years.

I had no idea about any of this, but am reading online that it just doesnt matter. Even people who voluntarily comply are then getting their entire savings taken!?

Obviously now I need to clean up this mess but am extremely worried that I will be screwed because I never filed my taxes. Is this going to make things worse?

What can I do? Who can I turn to without getting taken for a ride? I feel like I cant trust anyone.
All these websites and adverts for accountants who claim they know FBAR, etc but there is so much signal/noise ratio, I cant figure out who to turn to.

Any advice greatly appreciated. Are there any reputable places that wont take all my cash trying to help me stop the govt from taking all my cash?!

Cheers

Last edited by Bob; Feb 25th 2014 at 3:04 pm. Reason: personal info snipped
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Old Feb 24th 2014, 5:33 pm
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Default Re: FBAR - Am I screwed? :(

You only have to file FBAR if your foreign accounts are over $10k.
Don't worry even if you have not filed US taxes you probably don't own anything and hence there will be nothing to pay in back taxes and interest to the IRS. You need to file back taxes for the past 3 years and and FBAR if you meet the thresholds.

Go over to

UK-Yankee.com

And go to the US/UK taxes forum. Lots of help there.

Ok companies are Taxes of Epats and Greenback Tax along with some smaller boutique places. But if your finance are regular you can probably do it yourself by just down loading the forms from the IRS website.

Last edited by nun; Feb 24th 2014 at 5:39 pm.
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Old Feb 24th 2014, 6:18 pm
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Default Re: FBAR - Am I screwed? :(

If you can be in London on 2nd March (this coming Sunday) there will be an info session from 2:00 to 5:00 PM for those in a similar circumstance to yourself. It's an open meeting, and anyone can attend. See the following:

http://talk.uk-yankee.com/index.php?topic=82280.0
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Old Feb 24th 2014, 7:05 pm
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Default Re: FBAR - Am I screwed? :(

Thanks for the prompt replies!

Forgot to mention, yes I have had over £10k in my UK account for at least the last x years. I have read online that for every year I didnt file the FBAR, they could take up to 50% in fines for EACH year, virtually leaving me with NOTHING?!

Also forgot to mention, and this is probably where I AM SCREWED, is that I didnt file for 200x, the last year I was in the states. I worked for a company that took out taxes, but I never filed...again like an idiot, but I just didnt think of it when I moved. I am thinking this will be a major red flag with fines?

I am guessing I will need to hire someone just to make sure I am safe, but am really hoping I wont have to pay too much. And I definitely pray I dont need an attorney.

Is there a statute of limitations on my not filing all these years? Is there one for the FBAR?

I do not want to do anything illegal of course, but I would like to know my options on how to best go about this without raising alarms or getting in trouble. People suggest quiet disclosure but again in my case would that be suicide? I also read here and online that people who do voluntary disclosure, no matter how innocent, still get fined and lose all their savings.

So what should I do? How do we know who is well versed with FBAR and who is just a run of the mill accountant trying to cash in on this? I would hate to spend all the money to get the 'right help' but in the end lose it all because they didnt know what they were doing.

God, how can the US do this to us?! I am not some millionaire criminal. I am a middle aged/class single guy who has just been over here working. Really saddens me, as if I have no home anymore.

Thank you so much!

Last edited by Bob; Feb 25th 2014 at 4:48 pm.
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Old Feb 24th 2014, 7:24 pm
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Default Re: FBAR - Am I screwed? :(

I can sympathize.
I don't know how "real world" the penalty stories have been.
I think it's a disgrace, this amount of government intrusion, especially when you may not even owe taxes.

Land of the free indeed.
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Old Feb 24th 2014, 7:41 pm
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Default Re: FBAR - Am I screwed? :(

The minimum you need to do is file 3 years of US taxes and an FBAR. Or you might want to file FBAR for up to 6 years in past.

If your situation is relatively simple these folks might be of help.

http://www.greenbacktaxservices.com/...living-abroad/

Two excellent contacts are

Britishamericantax.com

and

[email protected]

Both of these are run by dual qualified tax professionals. They are probably expensive and might be overkill fro your situation, but they would provide ultimate peace of mind.
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Old Feb 24th 2014, 7:48 pm
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Default Re: FBAR - Am I screwed? :(

Originally Posted by WorriedXpat
So what should I do?
First, you fix a nice relaxing beverage of your choice, then find a really comfortable chair. Sit back, relax, and repeat after me:
"In the next 1 to 2 years there will be upwards of 1 million people sharing this OMG moment. I am not alone."

You have several options, but it's only fair to warn you they all come with some degree of risk.

You will need to do some research on line. For starters, look for "quiet disclosure", "filing going forward", and the "streamlined voluntary program" on the IRS site.

DO NOT enter the "Overseas Voluntary Disclosure Program" unless you feel you have wantonly evaded your filing responsibility; you are hiding millions offshore; or you have hid accounts for criminal purposes. The streamlined voluntary program is different from the OVDP you were warned about. The streamlined program is designed for those abroad in your situation.

But don't react immediately. Read. Research, and think things over. Understand what your options are. Then, if you feel you need assistance, seek out a reputable tax advisor. There are some around, and some are in London. If you go this route, it will cost you some money.

Added:

http://www.irs.gov/uac/Instructions-...r-US-Taxpayers

http://www.irs.gov/Individuals/Inter...ceduresNRNFTPs

Last edited by theOAP; Feb 24th 2014 at 7:57 pm. Reason: Add IRS sites
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Old Feb 24th 2014, 8:39 pm
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Default Re: FBAR - Am I screwed? :(

Haha Cheers!

Ok, I will try to relax with a drink but am worried because I really only have a month to deal with this by April, right? And most Accountants are busy as heck I am sure.

Or is it ok to figure this all out by the FBAR deadline in June?

I will check out all the links you both sent, cheers!

Thanks for all the help!
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Old Feb 24th 2014, 8:45 pm
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Default Re: FBAR - Am I screwed? :(

Originally Posted by WorriedXpat
Ok, I will try to relax with a drink but am worried because I really only have a month to deal with this by April, right? And most Accountants are busy as heck I am sure.
If you are resident abroad, you have until 15 June to file your 2013 return. Be aware if you owe any tax on that return, interest will be charged from 15 April.

As for previous years you appear to be already late, so the extra time won't have that much impact. Take your time and do it right.
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Old Feb 24th 2014, 10:30 pm
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Default Re: FBAR - Am I screwed? :(

Ahhh nice, I did not know that! Cheers!
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Old Feb 25th 2014, 12:56 am
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Default Re: FBAR - Am I screwed? :(

Originally Posted by theOAP
If you can be in London on 2nd March (this coming Sunday) there will be an info session from 2:00 to 5:00 PM for those in a similar circumstance to yourself. It's an open meeting, and anyone can attend. See the following:

http://talk.uk-yankee.com/index.php?topic=82280.0
Except that the event appears to be organized by the Isaac Brock Society, who have a lot of interesting information. However their website information is heavily tilted towards renunciation of U.S. citizenship as the solution. And doesn't appear to give much (or any) discussion as to the actual practice of the IRS on the ground as opposed to exact letter of the law.
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Old Feb 25th 2014, 1:14 am
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Default Re: FBAR - Am I screwed? :(

Originally Posted by WorriedXpat
Forgot to mention, yes I have had over £10k in my UK account for at least the last x years. I have read online that for every year I didnt file the FBAR, they could take up to 50% in fines for EACH year, virtually leaving me with NOTHING?!

Also forgot to mention, and this is probably where I AM SCREWED, is that I didnt file for 200x, the last year I was in the states. I worked for a company that took out taxes, but I never filed...again like an idiot, but I just didnt think of it when I moved. I am thinking this will be a major red flag with fines? I also had done a little freelance work that amounted to just about $10k, but thought since it was under $10k that I didnt have to file.
You've already had a lot of good advice on this thread. As others have said, Don't Panic. You're not the first U.S. citizen overseas to have been out of compliance and you're certainly not going to be the last. Ignore all the stories about FBAR fines of 50%, prison, etc, - unless you've got millions in a Swiss bank account or Cayman Islands trust, this shouldn't really be a concern. What the IRS can in theory do, and what they actually do in practice, aren't the same.

So based on all that, again as someone else has said, you should not be considering the offshore voluntary disclosure program. But you do need to catch up on your tax returns - at a minimum, you should expect to file 2011, 2012 and 2013. Plus FBAR forms for those years.

Your complication may be the years 2004 and 2005 that you didn't file. At best, you've missed out on a refund. At worst, the IRS filed a return for you based on the information they had available and have since added interest/penalties IF there was any tax due. If that occurred, you may be able to work around it by filing a correct return for those years too. It is possible that you may also need to resolve your State income tax issues (if applicable) for those years.

Is there a statute of limitations on my not filing all these years? Is there one for the FBAR?
Technically, there's no statute of limitations if you never file a tax return. However it's unusual for the IRS to go back more than 3 years (at least for overseas U.S. citizens), and highly unusual for them to go back more than 6 years. The FBAR statute of limitations is 6 years, technically, but again it's highly unusual to be prosecuted for non-filing.

You have lived in the U.S. before so you should be familiar with tax filing. There's not that much different when you are overseas except you need to become (very) familiar with forms 2555 (Foreign Earned Income Exclusion) and form 1116 (Foreign Tax Credit). Also you don't say how much you have in non-U.S. financial assets, but you should make yourself familiar with form 8938 and the reporting thresholds involved. If this applies, you will need to include it with your tax return for tax years 2011 onwards.

The deadline for filing tax returns, if you are living overseas, is June 15, and the FBAR deadline for 2013 is June 30. You should try to meet these deadlines. Your tax problems are probably nowhere near as serious as you think but you need to give the U.S. tax system the respect it deserves and become compliant by the middle of this year. It needs to be high on your priority list.

There is the option of purchasing tax software (TurboTax or TaxACT, for example) and use this to prepare your tax return. Why not start with the tax year 2013? Once you have done 2013, it should be fairly straightforward to complete tax years 2011 and 2012.

Last edited by Bob; Feb 25th 2014 at 3:05 pm.
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Old Feb 25th 2014, 4:47 am
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Default Re: FBAR - Am I screwed? :(

I had a similar OMG moment last year. I rang the FBAR hotline, the lady I spoke to said to file FBAR forms for the last six years. Staple to the current year's FBAR a letter explaining why you hadn't filed (in my case I just wasn't aware that the type of account I had was reportable - thought it was a type of pension, it wasn't) and that I hadn't received any taxable income from the account at any time), and staple a copy of that letter to each of the other forms. Then send them all in the same envelope.

I sent them in, they received them, that was that. Now I just have to continue going forward. Your case might be more awkward because of your missing tax returns and it might be wise to deal with the tax returns (last three years) before sending the FBAR (but don't miss this year's deadline for either).
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Old Feb 25th 2014, 11:43 am
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Default Re: FBAR - Am I screwed? :(

Originally Posted by Jscl
I had a similar OMG moment last year. I rang the FBAR hotline, the lady I spoke to said to file FBAR forms for the last six years. Staple to the current year's FBAR a letter explaining why you hadn't filed (in my case I just wasn't aware that the type of account I had was reportable - thought it was a type of pension, it wasn't) and that I hadn't received any taxable income from the account at any time), and staple a copy of that letter to each of the other forms. Then send them all in the same envelope.

I sent them in, they received them, that was that. Now I just have to continue going forward. Your case might be more awkward because of your missing tax returns and it might be wise to deal with the tax returns (last three years) before sending the FBAR (but don't miss this year's deadline for either).
This refers to paper FBAR filing, but note that you now have to do this on-line. At least in the on-line submission they give as one of the reasons for late filing, "Did not know that I had to file". It is on a drop-down menu. It shows that they acknowledge that there will be people in this category.
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Old Feb 25th 2014, 6:45 pm
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Default Re: FBAR - Am I screwed? :(

Ah yes, I haven't filed online yet. Doing it on paper it's probably a lot easier than having to explain it in check boxes/menus online.

Still, it does show that they don't go after every late FBAR filing.
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