abeatty44

Hi,

I moved to the USA from the UK in 2016 and have been filing my US taxes via TurboTax. It has just come to my attention that I should also have been filing FBAR for my wife and my UK employer pensions which have been sitting dormant since we left the UK - out of sight of of mind. We have not been drawing any income from these pensions.

Should I just file FBAR for these pension accounts now? I think they can be back filed up to 6 years? And am I likely to be fined for not filing these previously?

Appreciate any advice.

MidAtlantic

See this: https://www.irs.gov/individuals/inte...ion-procedures
The IRS will not impose a penalty for the failure to file the delinquent FBARs if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent FBARs, and you have not previously been contacted regarding an income tax examination or a request for delinquent returns for the years for which the delinquent FBARs are submitted.

Just go ahead and file them at the FinCen website: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html
The form has a drop down menu of reasons for late filing.

Glasgow Girl

So long as you have no unreported foreign income of any kind you will not be fined. Don't forget about Form 8938 with your tax return if you meet the thresholds.

ohiocalling

Hi, I have missed some years of FBAR.
I did not have a tax liability. This year I am starting filing again and have to fbar three joint bank accounts with my UK mother who's is deceased so two are now executor accounts. The third is now my personal account and a pension account. If I file april 2023 I will be making a quiet disclosure??????. Does this matter? There is no tax liability on previous years. Is it safe to file immediately and submit current fbar. Thanks

Glasgow Girl

If you did not meet the requirements to file FBARs in the years that you did not do so, and 2023 is the first year that you have once again met the requirement do so then you have no concerns resuming for the 2023 year.

If you should have filed years prior to 2023 but did not, and have reported all foreign income on your IRS tax return and paid the IRS all relevant tax on that income then you can file prior year delinquent FBARs and the IRS state they will not apply a penalty. Bear in mind that interest (or any income of any kind) on a joint account would need to be reported unless there is a clear case that you did not receive any of that income. Your mother’s name being first on the account, and evidence that you had no access to the income would be helpful to support that position.

If FBARs should have been filed for years prior to 2023 but were not, and there is unreported foreign income or unpaid tax then you may have cause for concern. When filing delinquent FBARs the reason for late submission must be stated, and generally that is being unaware of the requirement to do so. However having filed FBARs in prior years demonstrates your knowledge and understanding of the requirement to file and so that statement could be easily challenged and in a worse case situation you could face penalties for willful failure to file. If you are concerned about not meeting the requirement of the first two paragraphs above, i might consult with a professional because although the worst case situation is unlikely you could face rather large penalties if found to be willful, or if there is unreported income or tax and the IRS decide that you should have used the SDOP procedure in which case they will likely asses a penalty far in excess of the 5% penalty imposed by the SDOP procedure. A reasonable argument on the pension account may be that you were unaware of the requirement to report a pension account (which many people are unaware of), of course that assumes that you did not previously report a pension. Perhaps you were unaware of the requirement to report a joint account on which you mother was the sole person receiving income and making deposits and withdrawals.

Lastly, there is no quiet disclosure of FBARs alone because of the requirement to testify as to why they are late. Quiet disclosures only apply to amended tax returns filed with the intent of correcting delinquencies in foreign accounts without alerting the IRS to the delinquency. Don’t forget the requirement to file Form 8938 with your tax return if the thresholds are met, and/or the requirement to file Form 3520 if you received an inheritance in excess of $100K, or if a trust was involved.

ohiocalling

thanks very much , most informative. There was no interest on the accounts and my income was below tax threshold. So I presume me I can file the 2023 tax return then file. Apply for an fbar extension and dort that out later. Only problem is not sure exactly when last fbar was filed any idea how get that information without causing more problems. Thanks