Announcement

Collapse

The GaijinPot Forum Is Closed

Please join us on our new Facebook Group.
See more
See less

Top

Collapse

Filing US back taxes and should I file a FBAR??

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Filing US back taxes and should I file a FBAR??

    I'll try to keep this brief. Been here 15 years, typical ALT pay, filed first two years, then my US-based tax preparer said "Don't bother filing anymore". So I haven't. But I'm thinking I really, really need to, even though I don't owe. So, is there a *reasonable* CPA/tax-preparer familiar with US tax law in the Kanto region who can help me sort my 'gensenchoshahyos' and hopefully avoid penalties? SHOULD I try to file now, or wait until the US tax season is upon us? Should I file single, or married/filing separately? I realized I missed the IRS' THIRD 'second chance to come forward without penalties' by not filing this year - which I found out last night. What are the chances I'll have to pay penalties, even though I technically don't owe? What are the penalties?

    And secondly, has ANYONE here heard of the Treasure Department's FBAR?? Has anyone filed it?? I literally found out about that 24 hours ago, and am in panic mode because of the penalties! I have a post-office account, and this year is the first year it actually cleared 10K, which is the threshhold for filing requirements. HOWEVER... I am married, and have another bank account, in my name, that my husband contributes his salary to, and that is at 80K. According to all information I've found about the FBAR, once ANY account(s) in YOUR NAME reaches a total of 10K equivalent, you MUST file an FBAR for all the accounts. The penalties for failing to do so are absolutely outrageous, even for first-time offenders (like, 10% if I recall correctly for EACH YEAR you failed to file, which in my case would be nearly $40,000!!) and I can't find *anything* about avoiding penalties. Not only that, the FBAR form requires you to list all account numbers, bank addresses, whatever, so that Uncle Sam knows EXACTLY where that money is.

    So, should I file, or not? I've read several online hard-core expat blogs that say it's an excellent idea to file it, since the treasury doesn't necessarily want to take your money, just make sure where it is, but I cannot find a thing about avoiding the penalties. I can't afford to lose half of what we have. So my initial reaction is to only list the post office account on my tax form when I file this year, and file the FBAR on that. Does anyone have any insights or experience that can help me? I am seriously losing sleep over this.

    The place I found the most information was here: http://www.greenbacktaxservices.com/...bout-the-fbar/

    Thanks guys, for any advice or suggestions, I do appreciate it.

  • #2
    Originally posted by Adrift View Post
    And secondly, has ANYONE here heard of the Treasure Department's FBAR?? Has anyone filed it?? I literally found out about that 24 hours ago, and am in panic mode because of the penalties!
    Sounds like you are FuBAR...

    Originally posted by Adrift View Post
    I have a post-office account, and this year is the first year it actually cleared 10K, which is the threshhold for filing requirements. HOWEVER... I am married, and have another bank account, in my name, that my husband contributes his salary to, and that is at 80K. According to all information I've found about the FBAR, once ANY account(s) in YOUR NAME reaches a total of 10K equivalent, you MUST file an FBAR for all the accounts. The penalties for failing to do so are absolutely outrageous, even for first-time offenders (like, 10% if I recall correctly for EACH YEAR you failed to file, which in my case would be nearly $40,000!!) and I can't find *anything* about avoiding penalties. Not only that, the FBAR form requires you to list all account numbers, bank addresses, whatever, so that Uncle Sam knows EXACTLY where that money is.

    So, should I file, or not? I've read several online hard-core expat blogs that say it's an excellent idea to file it, since the treasury doesn't necessarily want to take your money, just make sure where it is, but I cannot find a thing about avoiding the penalties. I can't afford to lose half of what we have. So my initial reaction is to only list the post office account on my tax form when I file this year, and file the FBAR on that. Does anyone have any insights or experience that can help me? I am seriously losing sleep over this.

    The place I found the most information was here: http://www.greenbacktaxservices.com/...bout-the-fbar/

    Thanks guys, for any advice or suggestions, I do appreciate it.
    Scary! I have about 100K in one account and I haven't filed for about 17 or 18 years! Am I going to tell Uncle Sam where my cash is? Ummm..... lemme think... uh, NO!! wtf?

    Comment


    • #3
      Originally posted by hml View Post
      Sounds like you are FuBAR...


      Scary! I have about 100K in one account and I haven't filed for about 17 or 18 years! Am I going to tell Uncle Sam where my cash is? Ummm..... lemme think... uh, NO!! wtf?
      Lol, I did think of that pun actually, but my brain is so fried that I forgot to mention it. Several places I've read, including the hard-core expat one, said the US treasury isn't interested in taking your money unless they suspect you're trying to evade taxes, which is where the penalties come in, but I can't find anything on how to avoid penalties for late filing, which is worrisome. Apparently they CAN find you, all you have to do is use a foreign-issued credit card in the US, with your name on it. Woops...

      Comment


      • #4
        Originally posted by Adrift View Post
        .... Apparently they CAN find you, all you have to do is use a foreign-issued credit card in the US, with your name on it. Woops...
        Yes - under the Patriot Act - the US based credit card firms give an electronic copy of all transactions (world-wide) to the US government - and get paid for it - massively.

        Comment


        • #5
          I think you misunderstand FBAR. When the total of all accounts is over $10K you are supposed to file. Whether or not you have control over your husbandfs account and should list it is your call.

          If you file tax returns now and get penalized you may be able to get reimbursed from that tax preparer after you sue him for advising you to break federal law.

          About filing now—I would do it as soon as possible for 2011 and years prior. Google gFILED PURSUANT TO REG. SEC. 1.911-7(a)(2)(i)(D)h which should lead you to good information about filing late. I suspect they will allow you to claim the FEIE so you will owe nothing. Also this site has many threads about this subject.

          Comment


          • #6
            Originally posted by Plats View Post
            I think you misunderstand FBAR. When the total of all accounts is over $10K you are supposed to file. Whether or not you have control over your husbandfs account and should list it is your call.

            If you file tax returns now and get penalized you may be able to get reimbursed from that tax preparer after you sue him for advising you to break federal law.

            About filing now—I would do it as soon as possible for 2011 and years prior. Google gFILED PURSUANT TO REG. SEC. 1.911-7(a)(2)(i)(D)h which should lead you to good information about filing late. I suspect they will allow you to claim the FEIE so you will owe nothing. Also this site has many threads about this subject.
            Thank you for the info, I'll get on that as soon as I can (gotta work now!) I know about the total of all accounts, and both accounts are in my name, although the majority of the money is my husband's. I don't know if there is ALWAYS a penalty, or just if they think you're hiding offshore assets. I just can't find anything about the Treasury NOT levying a penalty, which is why I have little incentive to claim it. And local Japanese banks are not on the IRS radar, at least according to a July 2012 article I read, mostly Swiss and Israeli banks.

            Also, do you or anybody else reading this thread have an idea of a "quiet" disclosure (amended returns) versus a "noisy" disclosure (throwing yourself at the tender mercies of the IRS)? Tempted to do mine quietly, since doing a noisy one will obviously attract attention. http://www.khabar.com/magazine/money...ould_You_Apply

            Also, would love to have a recommendation based on experience for US tax preparers in the Kanto region. I'll take a look at the embassy recommendations, too.

            Comment


            • #7
              Originally posted by Adrift View Post
              Thank you for the info, I'll get on that as soon as I can (gotta work now!) I know about the total of all accounts, and both accounts are in my name, although the majority of the money is my husband's. I don't know if there is ALWAYS a penalty, or just if they think you're hiding offshore assets. I just can't find anything about the Treasury NOT levying a penalty, which is why I have little incentive to claim it. And local Japanese banks are not on the IRS radar, at least according to a July 2012 article I read, mostly Swiss and Israeli banks.

              Also, do you or anybody else reading this thread have an idea of a "quiet" disclosure (amended returns) versus a "noisy" disclosure (throwing yourself at the tender mercies of the IRS)? Tempted to do mine quietly, since doing a noisy one will obviously attract attention. http://www.khabar.com/magazine/money...ould_You_Apply

              Also, would love to have a recommendation based on experience for US tax preparers in the Kanto region. I'll take a look at the embassy recommendations, too.
              You're worrying too much about FBAR. It's a one-page doc, takes about five minutes to fill out. You send it to the treasury, they file it away and it's forgotten. No reason not to file it. Just send one today for this year and don't worry about past years.

              I don't know about quiet and noisy returns. Two good choices I can think of--file 2011 late and forget about the past, or file the past five years with a letter of apology, "I didn't know," etc.

              Comment


              • #8
                Regarding the "quiet" route, there is an excellent article here which should give you a good perspective on things. For other aspects of FBAR and penalties and current IRS thinking with regard to application of penalties, search that site for "FBAR" and you will find a wealth of articles from very experienced tax professionals on this. Some of it is mighty dense reading, but you will walk away with a much better understanding of this hatefully grey area of the US tax system.

                http://taxblawg.net/2011/08/26/going...living-abroad/

                Comment


                • #9
                  Originally posted by Majestic View Post
                  Regarding the "quiet" route, there is an excellent article here which should give you a good perspective on things. For other aspects of FBAR and penalties and current IRS thinking with regard to application of penalties, search that site for "FBAR" and you will find a wealth of articles from very experienced tax professionals on this. Some of it is mighty dense reading, but you will walk away with a much better understanding of this hatefully grey area of the US tax system.

                  http://taxblawg.net/2011/08/26/going...living-abroad/
                  Wow, thanks for that site! I'll take a look through it. I'm going to contact one of the CPAs listed in another thread for more info, and see what they say. I'll report back here when I find out, for sure. I can't be the only american getting freaked out over this.

                  Comment


                  • #10
                    The US government has a program called FBAR?????????????

                    Oh, my.

                    That really is FUBAR.

                    What's next, the SNAFU hotline????????

                    The GFARD Outreach programme????

                    Will the comedy never cease?????????????

                    Comment


                    • #11
                      Originally posted by Adrift View Post
                      Wow, thanks for that site! I'll take a look through it. I'm going to contact one of the CPAs listed in another thread for more info, and see what they say. I'll report back here when I find out, for sure. I can't be the only American getting freaked out over this.
                      I had someone prepare my taxes two years ago because it was complicated. Last year I filed on my own. This year, I had someone prepare my returns. I missed the FBAR in the between year because I didn't realize I had to file it. My current tax preparer told me to file it and forget it, which I did. I think right now, they are using the penalty to push people to file. If you fail to file now, they may start to come after people later. My tax preparer said he had not yet heard of anyone being persecuted for not filing the FBAR yet.

                      As for back taxes, I really would suggest hiring a tax attorney. It would be better to get them to do the filing, then represent you to the IRS in case they start making demands of back taxes or late fees. I think getting a letter in the mail from the IRS would be much worse than letting your attorney handle the IRS themselves. I even saw some tax attorney ads emphasizing that they help people with back filings.

                      Comment


                      • #12
                        Originally posted by ichitomo View Post
                        As for back taxes, I really would suggest hiring a tax attorney. It would be better to get them to do the filing, then represent you to the IRS in case they start making demands of back taxes or late fees. I think getting a letter in the mail from the IRS would be much worse than letting your attorney handle the IRS themselves. I even saw some tax attorney ads emphasizing that they help people with back filings.
                        I would say just the opposite. Going to an attorney makes you look sophisticated and possibly guilty of something. Ifd say doing the returns yourself, with a well-written letter of apology, would give better results than a letter on lawyerfs stationary, and would probably reduce the chances of being hit with back taxes and penalties. Ifm sure they are hit with hundreds or thousands of people coming out of the shadows and they are happy enough just getting them back on the books. Thatfs how I see it anyway.

                        Comment


                        • #13
                          I can't afford to hire an attorney anyway. I got one quote back from a CPA in Shinjuku, 70,000 per year I wish to backfile. Sorry, I'm better off filing on my own for that kind of money. He did say it was up to me whether or not to file a FBAR, so that was good. I guess I should contact the IRS and ask them how many back years they need, and what forms I should fill out, and do it myself. At least I have my japanese tax slips. Just in case, does anybody have any suggestions for a cheaper tax preparer than the quote I got above?

                          Comment


                          • #14
                            Originally posted by Adrift View Post
                            I can't afford to hire an attorney anyway. I got one quote back from a CPA in Shinjuku, 70,000 per year I wish to backfile. Sorry, I'm better off filing on my own for that kind of money. He did say it was up to me whether or not to file a FBAR, so that was good. I guess I should contact the IRS and ask them how many back years they need, and what forms I should fill out, and do it myself. At least I have my japanese tax slips. Just in case, does anybody have any suggestions for a cheaper tax preparer than the quote I got above?
                            First a tax preparer told you "not to bother" filing tax returns anymore, and now a CPA has told you it was "up to you" about filing FBAR. Well, at least now you know that you know more than these two "professionals" about what is required by law and that you'd better take care of it yourself.

                            Comment


                            • #15
                              The US govt. ____s up a lot of things but when it comes to collecting money you best believe they are diligent.

                              My guess is it will be only a matter of time before the US govt. refuses to renew one`s passport if they find the applicant hasnft been filling or owes money.

                              Comment

                              Working...
                              X