FBAR headache

[Fbarquestion 0]

So I've lived here a few years now and never needed to file taxes as my income was below the threshold to file a tax return. It is now above the threshold and I'm filing my very first tax return. 

 

This is where i found out about the FBAR (how I've never seen it before I don't know considering the penalties are crazy). I did have over the required amount to file the FBAR in foreign accounts. 

 

Here is where I'm unsure what to do, I can file late according to irs and not face penalty as long as the interest was reported and you owe nothing to the irs related to it. Now fair enough if I actually made enough income to file the tax return in the first place but I didn't so here I am. 

 

There is the streamlined procedure which requires you fill out six years of fbars and 3 years of tax returns but that is longer than I've been a green card holder. 

 

Do I just file the FBARs because I wasn't legally required to file taxes or file back taxes on below threshold income and the FBARs?

 

Can't afford to talk to specialist. Huge headache considering I've never even heard of it. 

 

Thanks

 

 

[Wuozopo 4,293]

@Fbarquestion

First question is did you have over $10,000 In Foreign banks or investments in all the years you have been here?

 

Second question. Did your foreign accounts pay you interest or any kind of earnings each of those years? How much (In US dollars) do you estimate? Would those earnings put you over the threshold for filing a US tax return when added to your US earnings? The point being, some people earn $12/year in interest. Others earn $45,000/year from investments. Would you say yours is chump change or significant investment income. Not the balance in the bank, but just what that balance earned in the year.

Edited February 12, 2020 by Wuozopo

[Fbarquestion 0]

Just now, Wuozopo said:

@Fbarquestion

First question is did you have over $10,000 In Foreign banks or investments in all the years you have been here?

 

Second question. Did your foreign accounts pay you interest or any kind of earnings each of those years? How much (In US dollars) do you estimate? Would those earnings put you over the threshold for filing a US tax return when added to your US earnings?

I did have over $10,000 it was made worse due to me moving the same money between banks as I was slowly moving it over due to bad exchange rates. The interest was my only income for the year as I was just living off the savings and if I added all the interest up and converted to USD would probably be a couple hundred dollars. So no where near threshold to file. 

 

No idea who to contact, do I just call the IRS and ask or do I call fbar people?

 

[Wuozopo 4,293]

Just now, Fbarquestion said:

I did have over $10,000 it was made worse due to me moving the same money between banks as I was slowly moving it over due to bad exchange rates. The interest was my only income for the year as I was just living off the savings and if I added all the interest up and converted to USD would probably be a couple hundred dollars. So no where near threshold to file. 

 

No idea who to contact, do I just call the IRS and ask or do I call fbar people?

 

The IRS is interested in making sure people report their interest earned abroad as income instead of hiding it. You didn’t report your small amount because you didn’t earn enough to file even if you had added it to your income. So try the online FBAR form. It’s been a year since I filled out my last one so I can’t remember what’s on it exactly. I think it asks what year you are reporting so fill out multiple times to cover each year.
 

You do not owe the IRS a tax return or any money so they shouldn’t be bothered with checking you out any further. If you hit a question you don’t know how to answer, write the whole thing out and I will see if I can help with the answer. I missed my first 2 years myself. Keep calm in understanding they are looking for cheaters who make big money and try to hide it. That’s not you.

[Fbarquestion 0]

3 minutes ago, Wuozopo said:

The IRS is interested in making sure people report their interest earned abroad as income instead of hiding it. You didn’t report your small amount because you didn’t earn enough to file even if you had added it to your income. So try the online FBAR form. It’s been a year since I filled out my last one so I can’t remember what’s on it exactly. I think it asks what year you are reporting so fill out multiple times to cover each year.
 

You do not owe the IRS a tax return or any money so they shouldn’t be bothered with checking you out any further. If you hit a question you don’t know how to answer, write the whole thing out and I will see if I can help with the answer. I missed my first 2 years myself. Keep calm in understanding they are looking for cheaters who make big money and try to hide it. That’s not you.

Thanks for the reply. I'll probably give them another call but they were not helpful the first time. Asked the lady about the IRS not filing penalty against you as long you've reported any interest and said i never filed due to income. Her response was to just repeat income taxes and fbar aren't related. So just gave up the call. 

 

Will just file FBARs and hope for the best. 

[Wuozopo 4,293]

17 minutes ago, Fbarquestion said:

Will just file FBARs and hope for the best. 

They won’t penalize you. They are after big time tax evaders. And the FBAR is not part of the tax return nor something IRS can help you with. It’s a yearly report to the FINcen part of the Treasury Department. it’s not due until April. You can file your tax return and wait on FBAR. BE SURE TO REPORT 2019 Interest on your tax return.
 

I am pretty sure it is going to ask if you earned interest and if you reported it on your tax return. That’s where you may not know how to answer because it doesn’t exactly address your situation.  I would have to look at it again. I personally just say I didn’t earn any interest so don’t dwell on that question so can’t remember the wording.

Edited February 12, 2020 by Wuozopo

[Fbarquestion 0]

33 minutes ago, Wuozopo said:

They won’t penalize you. They are after big time tax evaders. And the FBAR is not part of the tax return nor something IRS can help you with. It’s a yearly report to the FINcen part of the Treasury Department. it’s not due until April. You can file your tax return and wait on FBAR. BE SURE TO REPORT 2019 Interest on your tax return.
 

I am pretty sure it is going to ask if you earned interest and if you reported it on your tax return. That’s where you may not know how to answer because it doesn’t exactly address your situation.  I would have to look at it again. I personally just say I didn’t earn any interest so don’t dwell on that question so can’t remember the wording.

Just had a look at the form and looks like it just asks your personal info. Name, DoB and SSN. Then account number, maximum value etc. No sign of interest earned or if I reported to irs. 

[Wuozopo 4,293]

55 minutes ago, Fbarquestion said:

Just had a look at the form and looks like it just asks your personal info. Name, DoB and SSN. Then account number, maximum value etc. No sign of interest earned or if I reported to irs. 

Maybe that was a previous version or maybe it’s the FATCA form that asked something like that. 

[Tesco 70]

FBAR form FinCEN 114. You report the value of all foreign accounts if the total value is greater the $10,000, As you upload this form, you can add the year in question and there is also a field:

 

If this report is being filed late, select the reason for filing late

 

You can then add a pre-populated reason for failure to file, or free format option They only need the maximum value. It is not an IRS form, they can't help

 

FACTA form 8938 (an IRS form) goes into way more complexities and would be used by individuals with at least $50,000 in foreign assets. The form dives deep into detail. There are similarities between the two forms, regrettably, if qualified you'd need to file both
 

[Wuozopo 4,293]

4 hours ago, Wuozopo said:

Maybe that was a previous version or maybe it’s the FATCA form that asked something like that. 

Confirmed it’s the FATCA (8938) that asks about interest earned. Just looked a the form and remember it now. It’s $100k threshold if married filing joint return (when you live in the US). 

[Fbarquestion 0]

2 minutes ago, Wuozopo said:

Confirmed it’s the FATCA (8938) that asks about interest earned. Just looked a the form and remember it now. It’s $100k threshold if married filing joint return (when you live in the US). 

That's good. I don't need to file that one.

Appreciate the help. Gonna sleep better tonight. 

[Wuozopo 4,293]

1 minute ago, Fbarquestion said:

That's good. I don't need to file that one.

Appreciate the help. Gonna sleep better tonight. 

I only do it because I have three pensions which count. They are decades of contributions so conceivably might be worth $100k. Don’t know and couldn’t chase down a specific value so I just list them. TurboTax just copies them from the previous year so not a huge hassle. Not bothered if the IRS wants the name and address of my pension funds.  The weird thing is the IRS says if they do not have a specific value enter $0, so I do. Maybe they have me time marked in their computer to see if I start reporting the distributions when I get eligible age wise. 

[Regdkp 53]

Thank you for this thread. I did not know that I was supposed to file FABR for 2018 and 2019. I worked in US in 2016 (8.5 months) and 2017 (little less than 6 months). The tax consultants (hired by my company)  filed on my behalf, for both years, they asked for information and I provided. They did my tax filing for both US and India. Now, I recently became a Permanent Resident, got married to my husband year in Feb'20. 

 

FABR came to my mind today, as we are getting ready for joint filing for 2020. I visited him in 2018 and 2019 from India, and had no income in US, but after reading about substantial presence test, I realized that (I think) I probably needed to file FABR. I literally panicked about the consequences. This thread has given me some hope. I am going to file for 2018/2019 along with 2020. Fingers crossed!!!

[dalox303 2]

On 2/13/2020 at 12:52 AM, Wuozopo said:

Confirmed it’s the FATCA (8938) that asks about interest earned. Just looked a the form and remember it now. It’s $100k threshold if married filing joint return (when you live in the US). 

To be clear: My Wife and I filed last year jointly and will be filing this year jointly as well (Married 9/2020, ITIN received 7/2021, Green Card received 12/2021). My wife has a foreign bank account that exceeds $50,000 but not $100,000 (received life insurance money in 2021). I have no foreign assets or bank accounts. We are exempt from submitting a Fatca as it does not meet the $100k threshold correct?

Also, we missed the FBar last year for 2020. Will file two FBars this year, one reporting 2020 and one reporting 2021. It asks for a reason why were submitting the 2020 Fbar late, she didnt receive her ITIN until July 2021 so after the 2020 FBar deadline, valid excuse or just put  “we didnt know” ?

 

Thank you!

 

[Wuozopo 4,293]

23 minutes ago, dalox303 said:

We are exempt from submitting a Fatca as it does not meet the $100k threshold correct?

Correct.

 

25 minutes ago, dalox303 said:

It asks for a reason why were submitting the 2020 Fbar late,

Sorry I can’t answer that one. When I filed late it was a long time ago, on a paper form, and they didn’t ask. I don’t even know what their choices are on today’s FBAR. Maybe somebody else will help with that one.