Quiet disclosure of FBAR
Mar 7th 2011, 2:56 pm
#91
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Thread Starter
Joined: Mar 2009
Location: Florida
Posts: 78
Re: Quiet disclosure of FBAR
in 2009 my CPA told me that i didn't have to "bother" reporting interest on savings as it was so insignificant.
However I have since learned the Foreign earned income exclusion is exactly that... an exclusion on earned income. Interest is "unearned".
Add also the fact that the IRA don't recognise the tax free status of British ISA's.
I'm still trying to figure out whether or not I'm in the proverbial.
A saving grace might be the fact that as the UK is a higher tax environment, I dont have to pay tax on my British ISA to the IRS. I crunched a few numbers and found that if my all British income (earned and unearned) was taxed according to IRS tax tables, the tax due would have been less that what I paid to HMRC.
My other saving grace is that as I employed a professional to do my taxes, he could also be in the proverbial . There are severe penalties for CPA's that get it wrong too.
Hopefully I can re-file with a grovel note and submit FBAR for 2009.
Mar 15th 2011, 3:09 pm
#92
Forum Regular
Joined: Nov 2007
Location: South Staffs UK & Gulf Coast Florida
Posts: 137
Re: Quiet disclosure of FBAR/Offshore Voluntary disclosure
Further to the FBAR/disclosure debate, I came across this article when researching for a client. It's from a high profile tax firm and I guess could be described as interesting, illuminating or just down-right alarming....
With regards to the article reference to PFIC, in simple terms, think: ISAs, Personal Pensions, SIPPs with unit trusts in them for starters...
happy days eh
2011 Offshore Voluntary Disclosure Initiative (OVDI).
.............What will be needed to make a timely voluntary disclosure? As a starting point, all the financial records for 2003-2010 and all the filed tax returns (federal and state) to build the amended return models. The assessment of penalties is based upon a full disclosure of all worldwide income and foreign financial assets as defined in the FBAR rules and regulations.
Who Must File?
Any U.S. person, whether residing in the United States or abroad, who has a financial interest in or signature authority over any financial account in a foreign country must file a Report of Foreign Bank and Financial Accounts (FBAR) disclosing their interest in such accounts if the aggregate value exceeds $10,000. FBARs are due by June 30 of the year following the year that the account holder meets the $10,000 aggregate threshold.
There is no extension for filing an FBAR. Accordingly, if you have clients that are U.S. persons with an interest or signature authority over a foreign financial account and they have not previously filed an FBAR with respect to such account(s), you should strongly consider advising them to take advantage of the voluntary disclosure program now before the IRS discovers the account and the client.
FBARs, if not previously submitted, need to be completed for the past eight years for all foreign accounts. The latest FBAR form requires the determination of the highest balance in the account at any time during the year. Under the new OVDI program, the non-compliance penalty is 25 percent of the highest aggregate balance at any time during the eight-year period. Simply put, $1,000,000 highest balance means in most cases a $250,000 penalty. If there are mitigating factors that establish the failure as non-willful, reduced penalties may apply. However, experience to date indicates that the IRS employs a relatively low standard for determining willfulness.
Amended Returns
Preparing amended returns can be difficult, especially if information is not easily available. Replicating the original returns and analyzing considerable numbers of financial transactions has fallen on the CPAs' shoulders. After the data is analyzed, the amended returns are prepared.
One of the twists in this process has been the identification of foreign mutual funds, which are considered Passive Foreign Investment Companies (PFICs) under the IRS rules. There are provisions in the old and new voluntary disclosure programs that attempt to streamline the PFIC calculation process, but it remains a complicated process, made more difficult by currency conversion issues.
In addition, if the client has an interest in a foreign trust, controls a foreign corporation, has made transfers to trusts or foreign corporations, or received gifts from non-U.S. persons during the eight-year disclosure period, additional filings may be required.
Once the tax due from the amended federal returns is determined, there will be a 20 percent negligence penalty plus interest on taxes due, plus a failure to file and failure to pay penalty, if applicable.
Another disclosure issue can be state amended returns. Many states have a voluntary disclosure program, which if the taxpayer applies and is accepted, will reduce the risk of criminal prosecution as well as waive or reduce penalties. In New York, we note that the assistant attorneys general have been attending sessions with members of the U.S. Attorney's Office where proffers have been made. Connecticut has also been seeking this information for Connecticut residents.
Disclosure Process
After the attorney has completed interviews with the taxpayer, gone through a financial analysis and history of the account, and sent in the request for voluntary disclosure program acceptance, the IRS Criminal Investigative Division runs a check to see if the taxpayer is otherwise in the cross-hairs of the U.S. government. Not just taxes, other issues can result in rejection. So, a careful debrief of your client is critical to avoid a rejected disclosure and possible prosecution.
The attorney will inquire to be sure that there are no outstanding IRS civil examinations or criminal investigations of the taxpayer, that the IRS has not received information from a third party regarding the taxpayer's non-compliance, that the IRS has not already instituted a civil examination or criminal investigation of the taxpayer or that the IRS has not acquired information in connection with a criminal enforcement action (subpoena or litigation, for example).
Kovel Agreement
To protect the work product of financial analysis and preparation of the required returns and amendments, most attorneys engage an independent CPA under the so-called Kovel doctrine. The incumbent tax preparer is not usually employed to prepare the amended returns and FBARs as establishing privilege may be difficult.
Civil Exam
Once the Criminal Investigation Division of the IRS has made a determination that the taxpayer is eligible for acceptance into the voluntary disclosure program, it will send a letter indicating conditional acceptance. The case is then assigned to a Revenue Agent to verify the information submitted and determine the applicable penalties. At the end of the process, the taxpayer and Treasury sign a Closing Agreement.
New OVDI
The new OVDI borrows heavily from the terms offered in 2009 with several significant changes. First, the time period at issue has been increased from six to eight years. Taxpayers will now be required to pay back taxes, interest, and accuracy or delinquency penalties for tax years 2003 through 2010.
Additionally, taxpayers must now pay a penalty of 25 percent of the total asset value in all unreported foreign financial accounts and entities (calculated by reference to the year in which the value of such accounts and entities was the highest during the eight year period). This penalty, along with the penalties listed above, is "in lieu of" all other penalties that the IRS could assert, and was increased from the 20 percent penalty in the 2009 program.
Although the "in lieu of" penalty has increased, the IRS has expanded the group of individuals who may qualify for a reduced penalty rate. Individuals with smaller offshore accounts (i.e., where the value of the unreported accounts or assets did not surpass $75,000 in any year during the period) may qualify for an "in lieu of" penalty of 12.5 percent.
Inherited accounts are eligible for a reduced "in lieu of" penalty of 5 percent where the taxpayer 1) did not open the account in question, 2) exercised only minimal control over the account, 3) has not withdrawn more than $1,000 from the account in any year in the disclosure period, and 4) can show that all applicable U.S. taxes have been paid on funds deposited into the account. This is somewhat more favorable than the treatment of inherited accounts under the 2009 program.
Individuals classified as "accidental Americans" may qualify for a 5 percent "in lieu of" penalty if such persons were unaware that they had U.S. citizenship, for instance because they were born in the U.S. to non-U.S. parents and were raised outside the U.S.
Deadline
Individuals who wish to take advantage of the OVDI must act quickly. The IRS must receive all amended income tax returns, amended information filings, full payment of the amount due, as well as various other documents by Aug. 31, 2011. A complete application is required for acceptance into the OVDI. IF you are under examination or if the IRS has received information already regarding your foreign assets, you will not be eligible to participate in the new OVDI.
The content of this article is intended to provide a general guide to the subject matter. Clearly, specialist advice should be sought about your specific circumstances/assets................
With regards to the article reference to PFIC, in simple terms, think: ISAs, Personal Pensions, SIPPs with unit trusts in them for starters...
happy days eh
2011 Offshore Voluntary Disclosure Initiative (OVDI).
.............What will be needed to make a timely voluntary disclosure? As a starting point, all the financial records for 2003-2010 and all the filed tax returns (federal and state) to build the amended return models. The assessment of penalties is based upon a full disclosure of all worldwide income and foreign financial assets as defined in the FBAR rules and regulations.
Who Must File?
Any U.S. person, whether residing in the United States or abroad, who has a financial interest in or signature authority over any financial account in a foreign country must file a Report of Foreign Bank and Financial Accounts (FBAR) disclosing their interest in such accounts if the aggregate value exceeds $10,000. FBARs are due by June 30 of the year following the year that the account holder meets the $10,000 aggregate threshold.
There is no extension for filing an FBAR. Accordingly, if you have clients that are U.S. persons with an interest or signature authority over a foreign financial account and they have not previously filed an FBAR with respect to such account(s), you should strongly consider advising them to take advantage of the voluntary disclosure program now before the IRS discovers the account and the client.
FBARs, if not previously submitted, need to be completed for the past eight years for all foreign accounts. The latest FBAR form requires the determination of the highest balance in the account at any time during the year. Under the new OVDI program, the non-compliance penalty is 25 percent of the highest aggregate balance at any time during the eight-year period. Simply put, $1,000,000 highest balance means in most cases a $250,000 penalty. If there are mitigating factors that establish the failure as non-willful, reduced penalties may apply. However, experience to date indicates that the IRS employs a relatively low standard for determining willfulness.
Amended Returns
Preparing amended returns can be difficult, especially if information is not easily available. Replicating the original returns and analyzing considerable numbers of financial transactions has fallen on the CPAs' shoulders. After the data is analyzed, the amended returns are prepared.
One of the twists in this process has been the identification of foreign mutual funds, which are considered Passive Foreign Investment Companies (PFICs) under the IRS rules. There are provisions in the old and new voluntary disclosure programs that attempt to streamline the PFIC calculation process, but it remains a complicated process, made more difficult by currency conversion issues.
In addition, if the client has an interest in a foreign trust, controls a foreign corporation, has made transfers to trusts or foreign corporations, or received gifts from non-U.S. persons during the eight-year disclosure period, additional filings may be required.
Once the tax due from the amended federal returns is determined, there will be a 20 percent negligence penalty plus interest on taxes due, plus a failure to file and failure to pay penalty, if applicable.
Another disclosure issue can be state amended returns. Many states have a voluntary disclosure program, which if the taxpayer applies and is accepted, will reduce the risk of criminal prosecution as well as waive or reduce penalties. In New York, we note that the assistant attorneys general have been attending sessions with members of the U.S. Attorney's Office where proffers have been made. Connecticut has also been seeking this information for Connecticut residents.
Disclosure Process
After the attorney has completed interviews with the taxpayer, gone through a financial analysis and history of the account, and sent in the request for voluntary disclosure program acceptance, the IRS Criminal Investigative Division runs a check to see if the taxpayer is otherwise in the cross-hairs of the U.S. government. Not just taxes, other issues can result in rejection. So, a careful debrief of your client is critical to avoid a rejected disclosure and possible prosecution.
The attorney will inquire to be sure that there are no outstanding IRS civil examinations or criminal investigations of the taxpayer, that the IRS has not received information from a third party regarding the taxpayer's non-compliance, that the IRS has not already instituted a civil examination or criminal investigation of the taxpayer or that the IRS has not acquired information in connection with a criminal enforcement action (subpoena or litigation, for example).
Kovel Agreement
To protect the work product of financial analysis and preparation of the required returns and amendments, most attorneys engage an independent CPA under the so-called Kovel doctrine. The incumbent tax preparer is not usually employed to prepare the amended returns and FBARs as establishing privilege may be difficult.
Civil Exam
Once the Criminal Investigation Division of the IRS has made a determination that the taxpayer is eligible for acceptance into the voluntary disclosure program, it will send a letter indicating conditional acceptance. The case is then assigned to a Revenue Agent to verify the information submitted and determine the applicable penalties. At the end of the process, the taxpayer and Treasury sign a Closing Agreement.
New OVDI
The new OVDI borrows heavily from the terms offered in 2009 with several significant changes. First, the time period at issue has been increased from six to eight years. Taxpayers will now be required to pay back taxes, interest, and accuracy or delinquency penalties for tax years 2003 through 2010.
Additionally, taxpayers must now pay a penalty of 25 percent of the total asset value in all unreported foreign financial accounts and entities (calculated by reference to the year in which the value of such accounts and entities was the highest during the eight year period). This penalty, along with the penalties listed above, is "in lieu of" all other penalties that the IRS could assert, and was increased from the 20 percent penalty in the 2009 program.
Although the "in lieu of" penalty has increased, the IRS has expanded the group of individuals who may qualify for a reduced penalty rate. Individuals with smaller offshore accounts (i.e., where the value of the unreported accounts or assets did not surpass $75,000 in any year during the period) may qualify for an "in lieu of" penalty of 12.5 percent.
Inherited accounts are eligible for a reduced "in lieu of" penalty of 5 percent where the taxpayer 1) did not open the account in question, 2) exercised only minimal control over the account, 3) has not withdrawn more than $1,000 from the account in any year in the disclosure period, and 4) can show that all applicable U.S. taxes have been paid on funds deposited into the account. This is somewhat more favorable than the treatment of inherited accounts under the 2009 program.
Individuals classified as "accidental Americans" may qualify for a 5 percent "in lieu of" penalty if such persons were unaware that they had U.S. citizenship, for instance because they were born in the U.S. to non-U.S. parents and were raised outside the U.S.
Deadline
Individuals who wish to take advantage of the OVDI must act quickly. The IRS must receive all amended income tax returns, amended information filings, full payment of the amount due, as well as various other documents by Aug. 31, 2011. A complete application is required for acceptance into the OVDI. IF you are under examination or if the IRS has received information already regarding your foreign assets, you will not be eligible to participate in the new OVDI.
The content of this article is intended to provide a general guide to the subject matter. Clearly, specialist advice should be sought about your specific circumstances/assets................
Last edited by im9907620; Mar 15th 2011 at 3:10 pm. Reason: PS - sorry its a long read!
Mar 15th 2011, 4:17 pm
#94
Forum Regular
Joined: Nov 2007
Location: South Staffs UK & Gulf Coast Florida
Posts: 137
Re: Quiet disclosure of FBAR
sorry, overlooked that. credit to... http://features.withersworldwide.com...ary-disclosure
Mar 16th 2011, 2:52 am
#95
Retired
Joined: Apr 2004
Posts: 34,649
Re: Quiet disclosure of FBAR
zooqookoo, your post sums up my predicament as the OP of this thread.
in 2009 my CPA told me that i didn't have to "bother" reporting interest on savings as it was so insignificant.
However I have since learned the Foreign earned income exclusion is exactly that... an exclusion on earned income. Interest is "unearned".
Add also the fact that the IRA don't recognise the tax free status of British ISA's.
I'm still trying to figure out whether or not I'm in the proverbial.
A saving grace might be the fact that as the UK is a higher tax environment, I dont have to pay tax on my British ISA to the IRS. I crunched a few numbers and found that if my all British income (earned and unearned) was taxed according to IRS tax tables, the tax due would have been less that what I paid to HMRC.
My other saving grace is that as I employed a professional to do my taxes, he could also be in the proverbial . There are severe penalties for CPA's that get it wrong too.
Hopefully I can re-file with a grovel note and submit FBAR for 2009.
in 2009 my CPA told me that i didn't have to "bother" reporting interest on savings as it was so insignificant.
However I have since learned the Foreign earned income exclusion is exactly that... an exclusion on earned income. Interest is "unearned".
Add also the fact that the IRA don't recognise the tax free status of British ISA's.
I'm still trying to figure out whether or not I'm in the proverbial.
A saving grace might be the fact that as the UK is a higher tax environment, I dont have to pay tax on my British ISA to the IRS. I crunched a few numbers and found that if my all British income (earned and unearned) was taxed according to IRS tax tables, the tax due would have been less that what I paid to HMRC.
My other saving grace is that as I employed a professional to do my taxes, he could also be in the proverbial . There are severe penalties for CPA's that get it wrong too.
Hopefully I can re-file with a grovel note and submit FBAR for 2009.
Are there other things (credits etc.) that you might have claimed on your US tax return that you didn't?
The Voluntary Disclosure program is intended for those who have evaded large amounts of tax. If your amounts are small, then based on what others have reported, you may find there are better ways to regularize with the IRS, assuming you have any underpaid tax (which you may not).
Mar 16th 2011, 11:07 am
#96
Forum Regular
Joined: Nov 2007
Location: South Staffs UK & Gulf Coast Florida
Posts: 137
Re: Quiet disclosure of FBAR
How insignificant is insignificant? A few cents? A dollar? Ten dollars? A hundred dollars?
Are there other things (credits etc.) that you might have claimed on your US tax return that you didn't?
The Voluntary Disclosure program is intended for those who have evaded large amounts of tax.
Are there other things (credits etc.) that you might have claimed on your US tax return that you didn't?
The Voluntary Disclosure program is intended for those who have evaded large amounts of tax.
Things like ISAs and SIPPs and Shares will have tax credits that can be put into the pot against US taxes. In fact, any excess credits built up could be used, where relevant, against US tax on UK pension distributions and also to reduce US tax on UK pension lump sum.
I agree that the Voluntary Disclosure program is for larger amounts but bear in mind that those with PFICS (unit trusts/mutuals) in their SIPPs and particularly ISAs that have been held for years will be due back tax on accumulated annual income and gains potentially from inception. The PFIC tax can be punitive so the VolDis program might be relevant for more folks out there than we think.
Mar 24th 2011, 5:26 pm
#97
Forum Regular
Joined: Mar 2011
Posts: 83
Re: Quiet disclosure of FBAR
I posted this in one of the other forums recently and now see it is more appropriate here
I have lived in the US for 30 yrs and became a citizen 10 yrs ago.
I have three savings accts in HSB approx 10,000 pounds each Two are about eight years old from an endowment The other two years old from an inheritance. I have basically left them there rolling them over every six months.
My aged mother has power of attorney over these accounts and has been dealing with the rollovers
Since I opened the last one its been a constant stream of info that they seem to need over and over again. Passport copy, where I live etc.
These accounts have been left there basically for a rainy day and if my mother ever needs access to money.
Rightly or wrongly the minimal gains on these accounts have not been declared here on my tax returns
I am considering closing these accounts completely and transferring the money to here or my mothers account in HSB
I have already filed my taxes for this year
Any suggestions greatly appreciated as I'm not sleeping well at night reading about 20% penalties and expecting a letters in the mail from the IRS
I realize I prob need professional advice
I have lived in the US for 30 yrs and became a citizen 10 yrs ago.
I have three savings accts in HSB approx 10,000 pounds each Two are about eight years old from an endowment The other two years old from an inheritance. I have basically left them there rolling them over every six months.
My aged mother has power of attorney over these accounts and has been dealing with the rollovers
Since I opened the last one its been a constant stream of info that they seem to need over and over again. Passport copy, where I live etc.
These accounts have been left there basically for a rainy day and if my mother ever needs access to money.
Rightly or wrongly the minimal gains on these accounts have not been declared here on my tax returns
I am considering closing these accounts completely and transferring the money to here or my mothers account in HSB
I have already filed my taxes for this year
Any suggestions greatly appreciated as I'm not sleeping well at night reading about 20% penalties and expecting a letters in the mail from the IRS
I realize I prob need professional advice
Mar 24th 2011, 6:26 pm
#98
Just Joined
Joined: Feb 2011
Location: NJ
Posts: 4
Re: Quiet disclosure of FBAR
Get all your bank statements since Jan 1, 2003 and find a lawyer who has done a voluntary FBAR disclosure in the past.
There are some circumstances which allow for reduced penalties (ie less than 20%) one of which is if the combined values of the accounts is less than $75,000...of course, it's not quite that simple, and that's why you should take advice.
You'll pay any taxes due, plus interest, and then the penalties that are assessed...in return, you'll sleep at night and eliminate the risk of much more draconian penalties in the event that the IRS comes knocking at your door.
Good luck!
There are some circumstances which allow for reduced penalties (ie less than 20%) one of which is if the combined values of the accounts is less than $75,000...of course, it's not quite that simple, and that's why you should take advice.
You'll pay any taxes due, plus interest, and then the penalties that are assessed...in return, you'll sleep at night and eliminate the risk of much more draconian penalties in the event that the IRS comes knocking at your door.
Good luck!
Apr 7th 2011, 1:53 am
#99
Just Joined
Joined: Apr 2011
Posts: 13
Re: Quiet disclosure of FBAR
The FBAR isn't directly related to tax, it's just a reporting requirement.
If you only have joint accounts, you'll only submit one FBAR. If one of you has one or more individually held accounts, and the other of you just has joint accounts with the other partner, then also, you'll only need one return. You'll only need two individual returns if you BOTH have one or more individually-owned accounts.
If you only have joint accounts, you'll only submit one FBAR. If one of you has one or more individually held accounts, and the other of you just has joint accounts with the other partner, then also, you'll only need one return. You'll only need two individual returns if you BOTH have one or more individually-owned accounts.
thx!!
Apr 7th 2011, 4:10 am
#100
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: Quiet disclosure of FBAR
If you are resident in the US for tax purposes and the account was over $10k at any time during a tax year then it has to be declared to the Treasury on form TDF 90-22.1. If you filled out a US 1040 then any gains or interest from foreign accounts should be included on those. FYI gains in ISAs are not tax free in the USA. Also owning non US based pooled investments like unit trusts or mutual funds will open you up to the IRS's PFIC taxation rules.
Last edited by nun; Apr 7th 2011 at 4:19 am.
Apr 7th 2011, 12:47 pm
#101
Forum Regular
Thread Starter
Joined: Mar 2009
Location: Florida
Posts: 78
Re: Quiet disclosure of FBAR
Thanks Nun
Can i ask you to quote your info sourse on that.
I have tried to find out if cash ISA'a are treated as tax free by the IRS. Nobody seems to know. I have called the IRS helpline (nobody knew) and emailed them (No reply). However, I saw a thread on another expat forum where a chap said he was told they would be treat as tax free and that they are recognised as being (kind of) similar to a Roth-IRA.
I put up a thread on here "UK- USA tax treaty", regarding ISA's. Nobody replied. Let me repost here:
Can tax free interest from UK held cash ISA's can be entered in line 8b on 1040 ???
UK USA tax treatyARTICLE 1
General Scope
1. Except as specifically provided herein, this Convention is applicable only to persons
who are residents of one or both of the Contracting States.
2. This Convention shall not restrict in any manner any benefit now or hereafter
accorded:
a) by the laws of either Contracting State; or
b) by any other agreement between the Contracting States.
To me that sounds like the tax free status would be recognised by the IRS. Remember, getting an ISA tax wrapper is something you have to do proactively, and is a tax break enacted by British law for British citizens. Folowing the rules properly, only money that was invested prior to coming under IRS rules will be in a ISA. To the converse, hypothetically If HMRC axed ISA's then you would expect IRS to no longer recognise the tax free status.
It seems logical to me that ISA's would be tax free. After all, you can claim tax credits for foreign tax paid. In a way, its like a tax credit.
I'm going to call Internal Revenue Service at the London United States Embassy Grosvenor Square. I notice they have an International tax helpline.
[44] (207) 894-0476
Can i ask you to quote your info sourse on that.
I have tried to find out if cash ISA'a are treated as tax free by the IRS. Nobody seems to know. I have called the IRS helpline (nobody knew) and emailed them (No reply). However, I saw a thread on another expat forum where a chap said he was told they would be treat as tax free and that they are recognised as being (kind of) similar to a Roth-IRA.
I put up a thread on here "UK- USA tax treaty", regarding ISA's. Nobody replied. Let me repost here:
Can tax free interest from UK held cash ISA's can be entered in line 8b on 1040 ???
UK USA tax treatyARTICLE 1
General Scope
1. Except as specifically provided herein, this Convention is applicable only to persons
who are residents of one or both of the Contracting States.
2. This Convention shall not restrict in any manner any benefit now or hereafter
accorded:
a) by the laws of either Contracting State; or
b) by any other agreement between the Contracting States.
To me that sounds like the tax free status would be recognised by the IRS. Remember, getting an ISA tax wrapper is something you have to do proactively, and is a tax break enacted by British law for British citizens. Folowing the rules properly, only money that was invested prior to coming under IRS rules will be in a ISA. To the converse, hypothetically If HMRC axed ISA's then you would expect IRS to no longer recognise the tax free status.
It seems logical to me that ISA's would be tax free. After all, you can claim tax credits for foreign tax paid. In a way, its like a tax credit.
I'm going to call Internal Revenue Service at the London United States Embassy Grosvenor Square. I notice they have an International tax helpline.
[44] (207) 894-0476
Apr 7th 2011, 1:53 pm
#102
Just Joined
Joined: Apr 2011
Posts: 13
Re: Quiet disclosure of FBAR
Thank you nun
I actually got a reply that an ISA stocks and shares fund is not reportable but a cash ISA is.
I actually got a reply that an ISA stocks and shares fund is not reportable but a cash ISA is.
Apr 7th 2011, 2:45 pm
#103
Forum Regular
Thread Starter
Joined: Mar 2009
Location: Florida
Posts: 78
Re: Quiet disclosure of FBAR
Where did that reply come from? I would certainly imagine that a cash ISA is reportable on the FBAR form. Stocks and Shares ISA is no doubt more complicated, but you have "signature authority" over your account.
Apr 7th 2011, 3:16 pm
#104
Just Joined
Joined: Apr 2011
Posts: 13
Re: Quiet disclosure of FBAR
I emailed the FBARquestions email site and they said ISA stock and share is not reportable. We don't have a cash one. Now I'm confused!
Apr 7th 2011, 3:23 pm
#105
Forum Regular
Joined: Nov 2007
Location: South Staffs UK & Gulf Coast Florida
Posts: 137
Re: Quiet disclosure of FBAR
All ISAs are reportable (subject to the FBAR aggregate balance threshold). The word and tax benefit 'ISA' means nothing in the US. Any interest, income or gain is taxable in the US even if not the UK.
Highest risk are unit trust ISAs (e.g. like Jupiter) as the funds are a red flag under Passive Foreign Investment Company PFIC rules). Anyone with these type need to think about what to do, as investment fund managers are now beginning to write to ISA/Pension providers to identify US persons and ask them to sell their holdings (or transfer them to a non-US person).
You need to have US compliant funds in your ISAs (and even pensions) which provide the correct US tax reporting format of annual income and short/long term gains so that a CPA (or yourselves) can file correctly.
Highest risk are unit trust ISAs (e.g. like Jupiter) as the funds are a red flag under Passive Foreign Investment Company PFIC rules). Anyone with these type need to think about what to do, as investment fund managers are now beginning to write to ISA/Pension providers to identify US persons and ask them to sell their holdings (or transfer them to a non-US person).
You need to have US compliant funds in your ISAs (and even pensions) which provide the correct US tax reporting format of annual income and short/long term gains so that a CPA (or yourselves) can file correctly.
