Delinquent FBAR - seeking attorney

[caloak 0]

I live in the SF Bay area and my wife is from China, a Permanent Resident (it took us two years for her and daughter to arrive).

To cut to the chase: we are delinquent in filing FBAR, confused about the filing requirements.

I have heard of an amnesty program for delinquent filers.

I have looked at the FINCEN site and go away overwhelmed by the filing process.

So I am looking for an attorney that is qualified to assist me without gouging me. The last one I talked with was asking $20,000.

I have found good advice here and so I am putting this to the group hoping someone might be able to put me in touch with one.

Thanks,

Cal

[Cathi 5,778]

what is FBAR?

[RandyW 149]

Foreign Bank Accounts - Report of Foreign Bank and Financial Accounts (FBAR)

If you or your spouse have a foreign bank account which has exceeded a total value of $10,000, this should have been reported to the IRS using a Form TD F 90-221 for the year(s) during which the event occurred, on or before June 30th. Your spouse's bank accounts may fall under this umbrella even if he/she is living in China (if you are filing married filing jointly).

Stiff penalties may apply, ranging up to 50% of the account value for each year it was not reported. The IRS has had "voluntary disclosure" programs where you can donate some of your overseas account money to the IRS. If you do not owe any tax money on the undisclosed accounts, my advice is to MAKE CERTAIN of what you're doing before you donate ANY money to their coffers. In other words, these programs and penalties (and the FBAR report itself) are supposed to apply to actual tax cheats - not people who simply have unreported non-taxable money outside the US tax system.

Simply put, If you are NOT a crook, you should NOT owe any money.

Have you tried simply filing a late report?

[RandyW 149]

From the IRS at https://www.irs.gov/individuals/international-taxpayers/delinquent-fbar-submission-procedures

Follow these steps to resolve delinquent FBARS

• Review the instructions
• Include a statement explaining why you are filing the FBARs late
• File all FBARs electronically at FinCEN
• On the cover page of the electronic form, select a reason for filing late
• If you are unable to file electronically, contact FinCEN's Regulatory Help line at 1-800-949-2732 or 1-703-905-3975 (if calling from outside the United States) to determine possible alternatives to electronic filing.

DO NOT MAKE ANY DONATION (that is, pay ANY fee) unless you are certain of what you are doing.

Filing is VERY easy - it may take all of 15 minutes if you have your bank account information together.

[RandyW 149]

The REASONS to choose from for filing late include

• Forgot to file
• Did not know that I had to file
• Thought account balance was below reporting threshold
• Did not know my account qualifies as foreign

My advice is to just file it. Download the PDF form from http://bsaefiling.fincen.treas.gov/NoRegFilePDFIndividualFBAR.html to see what information you will need

Edited August 27, 2016 by RandyW

[Nich-Nick 3,354]

I live in the SF Bay area and my wife is from China, a Permanent Resident (it took us two years for her and daughter to arrive).

To cut to the chase: we are delinquent in filing FBAR, confused about the filing requirements.

I have heard of an amnesty program for delinquent filers.

I have looked at the FINCEN site and go away overwhelmed by the filing process.

So I am looking for an attorney that is qualified to assist me without gouging me. The last one I talked with was asking $20,000.

I have found good advice here and so I am putting this to the group hoping someone might be able to put me in touch with one.

Thanks,

Cal

FBAR just wants to know the name and address of place(s) holding foreign accounts and the highest balance. It is not that difficult to fill out. We totally missed the first year my husband was here (2008). Nothing has happened. They are looking for people trying to hide mega wealth in offshore accounts to avoid taxes. Don't think they would be bothered by an average person. I can't see hiring an attorney.

What years are you talking about? When did your wife become a US resident? Did you file a joint return the years before the year she arrived?

[caloak 0]

Thanks for the reply ... I did file joint tax returns during the years my wife resided in China waiting for the VISA approval. Do I need to go back to those years and file the FBAR for those as well? I am still doing research on this. And my research agrees with your encouraging words they are looking for BIG money holders. I was simply looking for legal advice and possible representation if things should turn ugly. I don't want to wake the dragon and not be ready for an audit or threat of fine.

[Nich-Nick 3,354]

Thanks for the reply ... I did file joint tax returns during the years my wife resided in China waiting for the VISA approval. Do I need to go back to those years and file the FBAR for those as well? I am still doing research on this. And my research agrees with your encouraging words they are looking for BIG money holders. I was simply looking for legal advice and possible representation if things should turn ugly. I don't want to wake the dragon and not be ready for an audit or threat of fine.

Well it won't be an IRS audit because FBAR is not part of the tax return. It is a report to the US Treasury's Financial Crimes Enforcement Network FinCEN. It is due June 30, unlike tax return due April 15.

It is for "US persons" defined

U.S. Person

IRC 7701(a)(30) and Treas.Reg. 1.1441-1©(2)

The term 'United States person' means:

A citizen or resident of the United States,

A partnership created or organized in the United States or under the law of the United States or of any State,

A corporation created or organized in the United States or under the law of the United States or of any State,

Any estate or trust other than a foreign estate or foreign trust.

See Internal Revenue Code section 7701(a)(31) for the definition of a

foreign estate and a foreign trust, or

Any other person that is not a foreign person.

So the years before she was here, was she a US person? I don't think so. Do a submission for each year she has been here. The form asks what year.

I always did the paper form. Then the UK account dropped below 10k so skipped a few years. This year I did the online form the first time for 2015. I recall fiddling around with it a bit because I hadn't done some drop down at the top and it wouldn't move on. There are instructions or overviews to read with that online form. You have to convert to US dollars so read where to find the Treasury Dept conversion rates. Do those ahead of time. No documentation has to go with it so it is basically an honor system type of reporting. Highest balance on any day in the year, not end of year balance. I don't think it is anything you have to fear. The fine is created to put some teeth in it for abusers who hide mega US earnings or profits in Swiss bank accounts.

Edited August 29, 2016 by Nich-Nick

[RandyW 149]

The online form is now the only option, although I believe there's a phone number you can call if you can't file online for some reason.

I hate to chime in here, since I don't think he'll have a problem filing just ONE FBAR (they'll have all the bank account information they need if they want to look into it), but here goes:

This is my own opinion - Yes, she was a "U.S. person". When you file married, filing jointly, you are electing to have your foreign-resident spouse treated as a U.S. resident for tax purposes. See

Nonresident Spouse Treated as a Resident

Yes, I realize the ambiguity, since this is for the IRS, but I believe it applies to the determination of a "U.S. person".

But again, I don't think he'll have a problem, as long as he simply FILES an FBAR.

[Nich-Nick 3,354]

This is my own opinion - Yes, she was a "U.S. person". When you file married, filing jointly, you are electing to have your foreign-resident spouse treated as a U.S. resident for tax purposes. See Nonresident Spouse Treated as a Resident

Yes, I realize the ambiguity, since this is for the IRS, but I believe it applies to the determination of a "U.S. person".

But again, I don't think he'll have a problem, as long as he simply FILES an FBAR.

At first I was thinking that same way. That's why I asked about tax filing status. Then I flip flopped because of the "choosing to be a resident alien for tax purposes". It's not for a tax benefit and the FBAR doesn't specifically mention resident aliens have to file. That would include ones on all kinds of visas who are not LPRs. So I changed my mind. I think she has been an LPR a couple of years so will file more than one FBAR...one for each of those LPR years.

[MariaR323 199]

I'll chime and and I totally agree with Nich-Nick above. The FBAR is not that difficult so you should just get it filed. As others have said as well, they're looking for BIG money mainly. Get it filed and should something arise from it, then move forward with seeking representation. Until then, get it filed as soon as possible and keep good records.