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Quiet disclosure of FBAR

Quiet disclosure of FBAR

Old Feb 10th 2011, 3:48 am
  #31  
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Default Re: Quiet disclosure of FBAR

Me too, but just wondering for K1'ers, do you have to file a return with respect to any income from the date you enter the US or from the date when your AOS is confirmed?

I have income with respect to my rental propery but it doesn't cover the mortgage payments - guess I have some reading to do if I don't want to morph into one of those vampire thingies!!
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Old Feb 10th 2011, 12:41 pm
  #32  
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Default Re: Quiet disclosure of FBAR

Originally Posted by Michelmas View Post
You're looking for ways to avoid paying the fines you rightly owe.
The OP does not at the moment owe any fines.

Originally Posted by Michelmas View Post
And for the record, yep, i'm pedantic, but I am also factual.
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Old Feb 10th 2011, 1:50 pm
  #33  
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Default Re: Quiet disclosure of FBAR

Originally Posted by celticgrid View Post
The OP does not at the moment owe any fines.
Umm... then I suggest you read his other threads!

Ian
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Old Feb 10th 2011, 2:20 pm
  #34  
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Default Re: Quiet disclosure of FBAR

Originally Posted by ian-mstm View Post
Umm... then I suggest you read his other threads!

Ian
Nope. Can't see it. A link to that which you refer would be helpful....
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Old Feb 10th 2011, 2:41 pm
  #35  
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Default Re: Quiet disclosure of FBAR

Originally Posted by MandyNi View Post
Me too, but just wondering for K1'ers, do you have to file a return with respect to any income from the date you enter the US or from the date when your AOS is confirmed?

I have income with respect to my rental propery but it doesn't cover the mortgage payments - guess I have some reading to do if I don't want to morph into one of those vampire thingies!!
MandyNi
If your AOS is 8Jan 2010, when your K1 was approved, then I would say its from that point forward that you are on the IRS radar. So you are OK because you are still within time. You have until June 30th 2011 to file your FBAR.

Your rental income etc needs to be accounted for on your 1040 tax form etc, which is due by April 2011. However, FBAR is concerned with the actual bank accounts that your rent goes into. They want the bank account number, address of bank, highest balance over the 2009 year. Any ISA's, savings, etc all needs to be declared....(any account that you have "signature authority" over) but the good bit is if all your aggregated money in UK is less then $10k (about GBP6300) you dont have to file FBAR. Bear in mind if you only exceeded this threshold by one day, you would have to file.
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Old Feb 10th 2011, 6:37 pm
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Default Re: Quiet disclosure of FBAR

Originally Posted by MandyNi View Post
Me too, but just wondering for K1'ers, do you have to file a return with respect to any income from the date you enter the US or from the date when your AOS is confirmed?

I have income with respect to my rental propery but it doesn't cover the mortgage payments - guess I have some reading to do if I don't want to morph into one of those vampire thingies!!
Mandy, yes, you are going to need to do some homework. The first year return is the hardest.

The situation under discussion is different from you for 2 reasons:
-K-1s do not become Permanent Residents at entry
-We're discussing reporting of foreign bank accounts, not rental income

You will want to look up for 2010 whether or not you met the residence test. This is different from your immigration residency status & is based on the number of days in the US. Your filing status will also take your spouse into account, depending on when you married.

Regards the rental income from the UK (or lack thereof) this is going to be an ugly reporting exercise. There's several threads discussing it to snoop through. As you want to start a small business, you're going to want to get familiar with the term 'writing off expenses' so maybe your DH can give you a mini crash course. Your rental will have expenses that you can write off.

Originally Posted by Michelmas View Post
I beg to differ. As someone else told you on here, for tax purposes, you became a permanent resident in 2009.
And he did file an ITR for 09. He's not the first, or last, to be caught out by FBAR. I've been warning people about various things like this for a long time but this item was never on my radar (because I -never- heard of any problems associated with it).
I'd suggest you and I could do more to make new arrivals aware of this issue as part of our community service.
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Old Feb 10th 2011, 6:50 pm
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Default Re: Quiet disclosure of FBAR

Originally Posted by chopper40 View Post
MandyNi
If your AOS is 8Jan 2010, when your K1 was approved, then I would say its from that point forward that you are on the IRS radar. So you are OK because you are still within time. You have until June 30th 2011 to file your FBAR.

Your rental income etc needs to be accounted for on your 1040 tax form etc, which is due by April 2011. However, FBAR is concerned with the actual bank accounts that your rent goes into. They want the bank account number, address of bank, highest balance over the 2009 year. Any ISA's, savings, etc all needs to be declared....(any account that you have "signature authority" over) but the good bit is if all your aggregated money in UK is less then $10k (about GBP6300) you dont have to file FBAR. Bear in mind if you only exceeded this threshold by one day, you would have to file.
The form is not that bad. It literally says name of bank, name and number of account. Highest balance for the year. It has various slots so you can do more than one account on 1 page. and even duplicate pages for more accounts. As we had house proceeds at one time we hit the limit. (also bear in mind the exchange rate - so it could be an amount between 6-7k GBP. I think the accountant just put all the accounts on the form. I actually have a spreadsheet that i keep for tax. I list the interest paid on all my various accounts each month so i can give totals to the accountant, and for uk accounts - i keep a note of the highest balance of the year. Under that i have ll the bank addreses typed out. that way - when i send the info to the cpa its all in one place.
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Old Feb 11th 2011, 12:04 am
  #38  
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Default Re: Quiet disclosure of FBAR

Perhaps it would be helpful to see what the IRS say for those who have paid their taxes but not filed this particular form:
http://www.irs.gov/businesses/intern...html?portlet=7

Question 17.

---


I have properly reported all my taxable income but I only recently learned that I should have been filing FBARs in prior years to report my personal foreign bank account or to report the fact that I have signature authority over bank accounts owned by my employer. May I come forward under this new initiative to correct this?


The purpose for the voluntary disclosure practice is to provide a way for taxpayers who did not report taxable income in the past to come forward voluntarily and resolve their tax matters. Thus, if you reported and paid tax on all taxable income but did not file FBARs, do not use the voluntary disclosure process.

For taxpayers who reported and paid tax on all their taxable income for prior years but did not file FBARs, you should file the delinquent FBAR reports according to the instructions (send to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late. The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and the FBARs are filed by August 31, 2011. However, FBARs for 2010 are due on June 30, 2011 and must be filed by that date.


-----


In other words, file the outstanding forms and stay compliant in future.
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Old Feb 11th 2011, 4:06 am
  #39  
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Default Re: Quiet disclosure of FBAR

Originally Posted by Bradford Lass View Post
Oh well I have just had a small heart attack reading this thread, I refiled 3 years of tax returns and paid interest and penalties when I discovered I should have declared the interest on my ISA after the tax preparer gave me wrong info, now I see they should have advised me re this. Well I have evidence that I in good faith refiled and payed and they obviously didnt know to file the form. I will be taking a trip to see them this weekend.

This article offers some hope...

http://blogs.forbes.com/janetnovack/...re-tax-cheats/
Do you own a cash ISA? I hope so because if its a stocks and shares ISA with UK investment funds you'll have to open another can of worms.
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Old Feb 11th 2011, 8:16 am
  #40  
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Default Re: Quiet disclosure of FBAR

Yay, there is some hope. Thanks for the link Bradford Lass!

I learned my mistake tonight and searched for answers...I am less concerned now.

But hope it is true:
"On the other hand, taxpayers who reported all their foreign income and accounts honestly on their tax returns, but didn’t know they had to file FBARs, don’t need to participate in the disclosure initiative, the IRS said; they can simply file the delinquent FBARs and explain their situation and won’t be hit with any penalties."

Last edited by EU_Girl; Feb 11th 2011 at 9:24 am.
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Old Feb 11th 2011, 8:23 am
  #41  
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Default Re: Quiet disclosure of FBAR

Thanks JAJ too! You helped me too. Ohhlala will file asap and explain why I missed FBAR last year referring to the below answer.

Originally Posted by JAJ View Post
Perhaps it would be helpful to see what the IRS say for those who have paid their taxes but not filed this particular form:
http://www.irs.gov/businesses/intern...html?portlet=7

Question 17.

---


I have properly reported all my taxable income but I only recently learned that I should have been filing FBARs in prior years to report my personal foreign bank account or to report the fact that I have signature authority over bank accounts owned by my employer. May I come forward under this new initiative to correct this?


The purpose for the voluntary disclosure practice is to provide a way for taxpayers who did not report taxable income in the past to come forward voluntarily and resolve their tax matters. Thus, if you reported and paid tax on all taxable income but did not file FBARs, do not use the voluntary disclosure process.

For taxpayers who reported and paid tax on all their taxable income for prior years but did not file FBARs, you should file the delinquent FBAR reports according to the instructions (send to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late. The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and the FBARs are filed by August 31, 2011. However, FBARs for 2010 are due on June 30, 2011 and must be filed by that date.


-----


In other words, file the outstanding forms and stay compliant in future.
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Old Feb 11th 2011, 1:01 pm
  #42  
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Default Re: Quiet disclosure of FBAR

Note that the FBAR is a whole lot easier to fill out if you have 25 or more foreign accounts, because then you do not have to list them with details, but merely state that you have 25 or more accounts. You need to keep records in case the Treasury come back to you.

It has been suggested that even something like a TfL Oyster Card with some credit on it is a reportable account ... or a gift card from Marks & Spencer worth £25...
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Old Feb 11th 2011, 6:03 pm
  #43  
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Default Re: Quiet disclosure of FBAR

Sorry if my questions are a bit silly, but FBARs is an area I lack in knowledge. OH and I will be relocating to the UK in the next 6mo. We will likely be transferring upwards of at least $25k to a UK bank account. Assuming we are able to keep our UK account balance higher than $10k (if we don't spend it all to re-establish ourselves), are we going to have to report the account to this IRS? Are we going to have to pay taxes on it again, even though we already paid US taxes on it in the first place? What if we are adding UK earned income to the account, can we wind up paying US taxes on it? I wasn't sure what publications to look at on the IRS.gov site to find out the answers.
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Old Feb 11th 2011, 6:10 pm
  #44  
 
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Default Re: Quiet disclosure of FBAR

Originally Posted by sunflwrgrl13 View Post
Sorry if my questions are a bit silly, but FBARs is an area I lack in knowledge. OH and I will be relocating to the UK in the next 6mo. We will likely be transferring upwards of at least $25k to a UK bank account. Assuming we are able to keep our UK account balance higher than $10k (if we don't spend it all to re-establish ourselves), are we going to have to report the account to this IRS? Are we going to have to pay taxes on it again, even though we already paid US taxes on it in the first place? What if we are adding UK earned income to the account, can we wind up paying US taxes on it? I wasn't sure what publications to look at on the IRS.gov site to find out the answers.
If you have more than $10k in overseas accounts the USC will have to submit the FBAR form to the US treasury, declaring the accounts and the highest amount help in each one during the year. The form for 2010 has to be submitted by end of June 2011.

All income, overseas or US, is declared to the IRS on your yearly tax return. Unless you have a huge income sum your UK income will be either taxed in the UK or US but not both.
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Old Feb 11th 2011, 6:24 pm
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Default Re: Quiet disclosure of FBAR

Originally Posted by sunflwrgrl13 View Post
Sorry if my questions are a bit silly, but FBARs is an area I lack in knowledge. OH and I will be relocating to the UK in the next 6mo. We will likely be transferring upwards of at least $25k to a UK bank account. Assuming we are able to keep our UK account balance higher than $10k (if we don't spend it all to re-establish ourselves), are we going to have to report the account to this IRS? Are we going to have to pay taxes on it again, even though we already paid US taxes on it in the first place? What if we are adding UK earned income to the account, can we wind up paying US taxes on it? I wasn't sure what publications to look at on the IRS.gov site to find out the answers.
Just to add to Lansbury's explanation.. the need to file the US Treasury Form TD F 90-22.1 is triggered by having more than $10,000 in a foreign account. If you have to file the return, however, you must include in it ALL foreign accounts, not just the one with $10K+ in it. If you are actually living abroad, that could add up to several accounts (your co-op Christmas Club account, a couple of small building society accounts, every account you own.) My example in an earlier post of your London tube Oyster Card was a bit tongue-in-cheek, but, strictly speaking it could be interpreted as coming within the rules...
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