FBAR - Am I screwed? :(
#21
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: FBAR - Am I screwed? :(
I like the way the electronic reporting page has "Financial Crimes Enforcement Network" in its banner. Talk about making people feel like they're potential criminals for having foreign accounts...
#22
BE Forum Addict
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,132
Re: FBAR - Am I screwed? :(
I had the same welcoming feeling when I e-filed my FBAR this year. What does it say on the pedestal of the Statue of Liberty, "Give me your tired, your poor, Your huddled masses yearning to breathe free". Guess things have changed since those days
#23
Just Joined
Joined: Feb 2014
Posts: 2
Re: FBAR - Am I screwed? :(
Hi @Worried Expat, I was in a similar predicament as yourself but managed to get everything sorted and fully compliant without being bankrupted in either fines or even accounting fees. I can personally vouch for Nun's recommendations for accountants, having used BritishAmericanTax, myself. They are expensive though and would probably be charging you at least £1000 pee year.
At least they were able to get me properly compliant without FBAR fines or having to hire an attorney. Mind you, I still have open statutes of limitations on my amended returns and FBARS but it's coming up to three years since my disclosure and so far so good! I did unfortunately wind up owing several thousand dollars in double taxes but it's just one of those things, as had been invested in British mutual funds which the IRS taxes heavily.
If your situation is simple, I can also vouch for IJ Zimmerman at Taxes for Expats. Have also heard good things about Artio & Partners. BeSt of luck!
At least they were able to get me properly compliant without FBAR fines or having to hire an attorney. Mind you, I still have open statutes of limitations on my amended returns and FBARS but it's coming up to three years since my disclosure and so far so good! I did unfortunately wind up owing several thousand dollars in double taxes but it's just one of those things, as had been invested in British mutual funds which the IRS taxes heavily.
If your situation is simple, I can also vouch for IJ Zimmerman at Taxes for Expats. Have also heard good things about Artio & Partners. BeSt of luck!
Last edited by monalisa1776; Feb 27th 2014 at 9:03 am.
#24
Re: FBAR - Am I screwed? :(
I did unfortunately wind up owing several thousand dollars in double taxes but it's just one of those things, as had been invested in British mutual funds which the IRS taxes heavily.
#25
Just Joined
Joined: Feb 2014
Posts: 2
Re: FBAR - Am I screwed? :(
JAJ, you're probably right. I unfortunately panicked after hearing about FBAR fines and PFIC taxation and wound up paying over two year's salary in both US taxes and accounting fees. And because I had become fully compliant, my ongoing tax preparation fees were going to be over £1200 per year going forward. I concluded that this ongoing compliance would be too burdensome so expatriated. Perhaps I'd been duped by a pedantically correct accountant, especially as I'm not worth that much but it gets anomalous because I hadn't realised that I had to declare my ISA income, as its tax free in UK
I've been living in UK for over 25 years so had believed that the tax treaty fully protected me from double taxation and hadn't been aware of the savings clause which enables the US to double tax in some instances, as in my case. At least my accountant kept me out of Obsolete which would have probably bankrupted me, especially with all the inevitable attorney fees on top. They also believed I had enough reasonable cause not to need an attorney.
I'll never know if I made the beSt decision but wouldn't have realistically been planning to move back to the States anyway, having fully settled in Britain with my English spouse. The problem I now see is that with FATCA coming, it would have been too risky not to fully declare all the mutual funds as PFICS, especially as I also had to file 8938..the stakes seemed too high and wanted to be able to sleep at night. I unfortunately feel that I'm collateral damage having been swept up in the net of citizenship-based taxation by the US. So you could say I drew a middle straw.... UK.n
I've been living in UK for over 25 years so had believed that the tax treaty fully protected me from double taxation and hadn't been aware of the savings clause which enables the US to double tax in some instances, as in my case. At least my accountant kept me out of Obsolete which would have probably bankrupted me, especially with all the inevitable attorney fees on top. They also believed I had enough reasonable cause not to need an attorney.
I'll never know if I made the beSt decision but wouldn't have realistically been planning to move back to the States anyway, having fully settled in Britain with my English spouse. The problem I now see is that with FATCA coming, it would have been too risky not to fully declare all the mutual funds as PFICS, especially as I also had to file 8938..the stakes seemed too high and wanted to be able to sleep at night. I unfortunately feel that I'm collateral damage having been swept up in the net of citizenship-based taxation by the US. So you could say I drew a middle straw.... UK.n
Last edited by monalisa1776; Feb 28th 2014 at 8:35 am.
#26
Re: FBAR - Am I screwed? :(
JAJ, you're probably right. I unfortunately panicked after hearing about FBAR fines and PFIC taxation and wound up paying over two year's salary in both US taxes and accounting fees. And because I had become fully compliant, my ongoing tax preparation fees were going to be over £1200 per year going forward. I concluded that this ongoing compliance would be too burdensome so expatriated. Perhaps I'd been duped by a pedantically correct accountant, especially as I'm not worth that much but it gets anomalous because I hadn't realised that I had to declare my ISA income, as its tax free in UK
A person who has an investment in something that might be a PFIC, or might be regarded as one in future, might choose to divest of it and simply pay capital gains tax.
FBAR fines, there's never been a reported case of an FBAR fine absent a prosecution for tax fraud (unusual) and/or significant under-payment of tax. Those who went into the voluntary disclosure program also got fined, however this was unnecessary for all but a small minority.
The problem I now see is that with FATCA coming, it would have been too risky not to fully declare all the mutual funds as PFICS, especially as I also had to file 8938..the stakes seemed too high and wanted to be able to sleep at night.
As for FATCA, the U.K. agreement with the United Kingdom excludes certain investment, including ISAs, from the scope of reporting. That doesn't mean that they are tax free to a U.S. citizen but it does mean that the IRS isn't all that concerned about receiving the information. The real focus of FATCA is to force tax havens to stop offering secret bank and investment accounts to those seeking to evade U.S. tax. The FATCA agreements with onshore jurisdictions like the United Kingdom and Norway are mainly there to show the governments of tax havens that they are not being singled out.