FBAR deadline on June 30, 2015. Where to submit FBAR form?

A quick reminder:
FBAR deadline is just a week away - on June 30, 2015
http://www.irs.gov/uac/Newsroom/Taxpayers-with-Foreign-Assets-May-Have-FBAR-and-FATCA-Filing-Requirements-in-June

I have already filed mine last weekend. I put a reminder on Google calendar, on my phone, etc, to make sure that I don't miss it - and hope that all of you will remember to do the same too.

Now, even though I have previously filed (late) FBARs, I don't always remember the instructions exactly, which is why I started this blog - to serve as a diary/reminder on what needs to be done when the filing season approaches.

To submit your FBAR form, go to this site:-
http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

If you had previously chosen the PDF version, click on the PDF icon.
Personally, I think that the PDF forms are more user-friendly when it comes to filling up detailed information that I don't remember off the top of my head (eg, bank account numbers, bank addresses, amount for each savings/checking, CD account, interest rates for each savings/checking, CD account)

**I assume that you have already prepared your FBAR form. Otherwise, there's simply not enough time together all the information needed. But, late or on time, you will still need to file your FBAR, so here are some info/blog postings about the initial steps :-

http://fbar8938.blogspot.com/2014/10/how-to-file-fbar-if-you-do-not-have-all.html

Extremely important:
While preparing the PDF version of your FBAR filing, always save an "unsigned" copy of the form in case you need to make corrections. Once you sign the form, you will not be able to edit it - and if you need to make a correction, that means having to re-type the form all over again!

Important information to include in spreadsheets for 8938

I had to edit my spreadsheets and re-read bank statements 6-8 times :( because I missed out information that I should have typed out in the spreadsheet (to make it easier when the time comes for filling in forms 8938 and FBAR - "copy/paste")
So, to make it easier for all of you, here is a checklist of information you should include in your spreadsheet while doing the calculations:-
1) Total interest earnings
2) Total amount in all foreign bank accounts
3) Addresses of foreign banks
4) All foreign bank account numbers
5) Amount in each and every foreign bank account

Form 8938 (Statement of Specified Foreign Financial Assets)

Here are the links for :-
Forms 8938
http://www.irs.gov/pub/irs-pdf/f8938.pdf
Instructions for Form 8938
http://www.irs.gov/instructions/i8938/index.html

The latest version (year 2014) is available on IRS' websites
I am using version 2013 of Form 8938 and when I found out that the latest version is available, it is too late...I have already filled up about 29-30 pages of the Form & the "Continuation Statements"! I'll have to find out from my tax preparer if it's ok to just stick to version 2013. I don't want to have to re-type everything again :(:(:(:(:( *sob sob sob*

Here, I will be sharing what I did with Form 8938, which may or may not be 100% accurate. So, please check with tax professionals if you need to

(Disclaimer: This blog details my personal experience filing (late) FBAR and 8938 (tax return amendments for year 2011, 2012 and 2013). Anything written here SHOULD NOT be taken or interpreted as legal advice)

Page 1...

"If you have continuation statements" - I checked the box because I haev approx 29-30 accounts (savings, checking, CDs -each CD is considered as a separate account even if they're within the same bank)

"TIN" refers to your tax identification number or Social Security Number

(to be continued)

Historic Exchange Rate (for FBAR and 8938)

Found a website where you can obtain information about past exchange rate...(to calculate interest amount for foreign bank accounts INTs)
http://www.x-rates.com/historical/

Correction (Feb18, 2015): Please disregard the above info that I posted last week. For FBAR & 8938 filing, we need to use- specifically, the end-of-year exchange rates posted by the Treasury, which can be obtained here (I'm including the links...and a screenshot to show what the page looks like):-

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Department-End-of-Year-Exchange-Rates

Year 2008
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2008

Year 2009
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2009

Year 2010
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2010

Year 2011
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2011

Year 2012
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2012


Year 2013
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2013


Year 2014
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Treasury-Reporting-Rates-of-Exchange-as-of-December-31-2014

You may also be able to get the rates directly from the source- Treasury's website (below), but the last time I checked, only info for the most recent 2 years 2013 & 2014 were available
 http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/treasRptRateExch_home.htm

How to calculate interest earned from non-US bank accounts for FBAR and 8938

*gulp* the mere though of accomplishing this is overwhelming. I know that there are many of you out there who are like me, working class, don't have extra budget to hire a CPA to do most of the work so I will try my best to share, step-by-step my (far from perfect) method of FBAR and 8938 reporting (whatever it is that I can do and you can do on our own before you call a CPA or tax preparer for help).

1) Compile all bank statements (or as many as you can possibly get - the ones that are missing, well, you can sort of guess the % of interest per month/per year to estimate the total amount.

2) Use the spreadsheet. There are no available templates/formats out there as a guidance (not that I know of - and I've browsed up to approx 600 websites)...so I am sharing my own version (& this is my progress thus far, since my very first blog posting here):-

*Important info to include in your spreadsheet so you don't have to keep referring to your bank statements when filling up Form 8938
i) Bank account numbers
ii) Bank names & address
iii) Total interest accrued for the tax year (converted to USD)
iv) Maximum value of account during tax year (converted to USD)
v) Was/were the account/s opened during the tax year?
vi) Total interest of all bank accounts for the tax year (converted to USD)
v) Maximum value of all accounts for the tax year (converted to USD)

3) Repeat the above for all years (previous years that you've missed)

4) Next, we needs to convert the total amount of interest earned per year to USD (I am still at Step 2 :p *exhausted*...so these are I can share now about what to do)

5) My blog posting on how to obtain past currency exchange rates

(Source: http://www.expattaxstory.us/2012/week19/ )

Tax Stories from Americans Abroad

Are you an American abroad who been impacted by new or newly-enforced US tax legislation? We want to hear from you.

May 6, 2012 - May 12, 2012

05/12/2012

Neither a tax preparer nor the US government could provide guidance on compliance

As a retired military reservist, I was able to request assistance from the US Tax Preparer service at the nearest base. The preparer had no idea what to do about FATCA. In order to comply with FATCA, I was referred all the way to the Chief of Tax Services for the Judge Advocate General Corps in my branch of the service overseas who in turn admitted to being wholly ignorant of how to comply, A lot of my final filing was guesswork on both our parts, It is terribly demoralizing to try to be a good and honest US citizen and to be unable to comply.
Something like FATCA also discourages American firms from sending executives to overseas assignments which ultimately will damage the US economy and the US reputation internationally.
Country of Residence Belgium
Voting State New York

Posted on 05/12/2012 in Tax Story from Abroad | Permalink

05/11/2012

tax avoidance

I left the US to work in development overseas in the mid-70s and have lived in the US twice, 2 yr total, since then. Those were the only years I paid taxes, for I have not paid them when out. Nor have I filed forms for tax purposes. My wages overseas have been low and making a connection with the US govt, tax offices, getting forms etc. near impossible. So, rather than comply I have ignored the rule that I should file forms even if I don't pay taxes. The upshot is - the whole process should be simplified, and made more accessible, if they want Americans abroad to follow the law.
Country of Residence Malawi
Voting State California

Posted on 05/11/2012 in Tax Story from Abroad | Permalink

I don't know where to begin

I moved a broad years ago to work for an NGO. I didn't file in the USA because my income was well under the threshold. Over the years I ne'er worries about it, but I actually didn't understand that I was supposed to file. If I've ever had to pay taxes in the it's very unlikely that my income was high enough. Now I want to come clean with the IRS but I am terrified that I Will be hit with a big tax bill that I cannot afford.

I have been refused banking services in Europe because I am an American.

I have been refused a brokerage account for my roth ira in the us because i live abroad.
Country of Residence Belgium
Voting State Oregon

Posted on 05/11/2012 in Tax Story from Abroad | Permalink

05/10/2012

3 tax returns in 1 year!

I left the US 25 years ago. Filing returns in both Canada and the US was time consuming and pointless (I hold no US accounts, own no US property, I have no US financial life).

When I immigrated to Australia I had to file Australian, Canadian (in year 1) and US returns. Despite my long disconnection with the US, I AGAIN had to prove that I was not a US tax resident. The rules for counting days (adujusting for time in international airspace and water, etc)is mind-boggling and pointless.

I do not owe US taxes. I have no financial connection with the US. I work hard for a moderate salary. I pay a lot of tax in Australia.

Why can't the US rule that people who have permanently left the US and have no US assets, need not file a full return every year?

No other OECD country burdens its citizens in such a draconian manner.
Country of Residence Australia
Voting State New York

Posted on 05/10/2012 in Tax Story from Abroad | Permalink

Confusion and worry about reporting/ double tax

I have been filing a normal income tax return since moving abroad, and -- as I am moving up in salary -- am getting close to the point at which I'd be double taxed on my income. I already pay hefty income tax in my country of residence (Norway), and since I work for a Norwegian company, do not receive any of the deductible benefits that many expats get (e.g. housing allowance, school fees, etc). I find it alarming that I may soon be in a position to be double-taxed on income when I haven't lived in the US for 8 years.

Also, I am deeply confused about how to deal with the FBAR requirement. This year is the first I've heard about it (and only know about it thanks to DA), and now I'm in doubt as to how to proceed. Do I go through the hassle of reporting and possibly set myself up for huge fines, plus having to then go through the hassle every year after, or do I just not report and cross my fingers that I won't get caught? My non-reporting of FBAR was not malicious, it was simply due to a lack of knowledge of the reporting requirements; but now with all this talk of draconian fines, etc, it hardly makes one motivated to try to comply -- especially since I'm not doing anything wrong.
Country of Residence Norway
Voting State Utah

Posted on 05/10/2012 in Tax Story from Abroad | Permalink

05/09/2012

FBAR scare

I came to Jordan in 1994 and was employed initially an as ESL teacher at AL al-Bayt University in Mafraq, Jordan. In 1995 I was married to a Jordanian citizen, and after our first child was born in 1997, I left teaching and began working as a free-lance translator. In 1996 I inherited some money from an aunt of mine, and used the money to buy land in Jordan and build a house for our family.

I have filed US tax returns ever since I came to Jordan, but in 2001, I began using the services of a tax preparer in the US. The tax preparer sends out a yearly "tax organizer" with questions the answers to which help him to prepare my tax returns. In the beginning I had very little in my bank accounts here (one in dinars, one in dollars), which I had opened after I married simply to facilitate day-to-day transactions. However, in around 2003, I was encouraged by my husband to bring money I had inherited from my mother, who passed away in 2000, to Jordan and invest it in land. I took his suggestion, and in 2005 we sold some land, which brought a good profit, and I deposited the proceeds in my Jordanian bank account. I told my tax preparer about the land sale on the tax organizer, but for some reason he didn't notice this, and didn't follow up on it. Trusting him as the expert in tax matters, I didn't ask him why he hadn't followed up on this, and the capital gains tax on the land sale went unpaid.

There was also, on the tax organizer, a question about whether I had foreign trusts, accounts, etc., over which I had signature authority. Reading the word "trusts" in the beginning of the question, I guess I failed to read the rest of the question carefully, and answered in the negative. In subsequent years I answered the question in the same way out of habit. Then one year, in 2008, I read the question more carefully, and answered in the affirmative, but my tax preparer didn't follow up on my response. If he had, I would have realized then that I was supposed to be filing FBAR's, which I had never heard of and knew nothing about. It was only a few years later that my tax preparer noted that I had begun answering the question in the affirmative, and told me I would need to submit the FBAR. Due the inheritance money I had brought here and, later, the proceeds from the land sale, my account had gone significantly beyond $10,000, and before I knew it, I was being required to apply to the OVDI. Doing so involved months of grueling review of all my financial affairs going back to 2003 under the supervision of my tax preparer. I paid the back taxes due on the land sale plus interest and penalties, and submitted all documents required by the OVDI program. My case is still pending.

Due to the large bank balance I had for a period of time for the reasons mentioned above (and which has been depleted significantly since through money lost to a failed investment and living expenses – my income as a translator averages around $30,000 a year, and Jordan is expensive), the potential OVDI penalty comes to $50,000. Even if I "opt out" of the OVDI program, I face the possibility of having to pay the same amount, since the FBAR failure-to-file penalty is $10,000 a year. This seems grossly unfair to me, especially given the fact that (1) I have conscientiously filed tax returns during all my years in Jordan, (2) I have now paid all the taxes I had owed on all sources of income, including the rather insignificant amount I had received in interest on my Jordanian bank accounts, and (3) my tax preparer never informed me in simple, direct language about US tax laws applying to foreign bank accounts. My failure to file the FBAR was based solely on misunderstanding of a question, and lack of information (which I believe my tax preparer should have supplied me with when I first employed him). The US government itself, to my knowledge, never made the effort to inform its many tax-paying citizens abroad of the FBAR requirement, and it is not their fault that they haven't known about it.

When I realized I was having to apply to a program intended for frauds and tax evaders, the emotional impact was traumatic, not to mention the potential fines, which involve money I've been planning to spend on my children's college educations. I could hardly believe this was happening. I've learned a lot about US tax law in the process, but I don't believe I should have had to learn it in such a hard way, and I appreciate the efforts being made by Democrats Abroad on behalf of people in situations similar to mine.
Country of Residence Jordan
Voting State Indiana

Posted on 05/09/2012 in Tax Story from Abroad | Permalink

Burdensome, confiscatory, undemocratic and abysmal for US influence and reputation abroad

No story per se, just a list of facts, in no particular order, that are increasingly burdensome, confiscatory and undemocratic:

1. My US bank refuses to send mail to an overseas address and I cannot bank on line.

2. Tax returns + Fatca + Fbar are increasingly complex, difficult to understand and time-consuming obligations to fulfill. There's something really wrong when you are forced to use a tax preparer and pay the professional *more* than your tax liability to be able to file the paperwork.

3. My local bank warns that it may well throw me out; they are neither equipped to produce the types of documents the US demands nor do they want to have to face the costs, risks, intervention and violation of other clients' privacy simply because of American clients. Their interest and ROI are in getting rid of US clients. As such, I may no longer be able to function here at all.

4. The bilateral tax treaty does not offer protection from double taxation any more. We are directly, or indirectly (via the marginal rate), doubly taxed in many respects. In addition, the IRS' unilateral decision in 2008 to no longer recognize social taxes as taxes, thus eligible for tax credits, means we bear an increasingly huge burden (which has increased 50% in 5 years).

The treaty never considered any tax that did not have a US equivalent. And these are multiplying as all countries scurry to seek out extra tax revenue with which to lower their deficit.
Moreover, we can’t take advantage of any savings and retirement planning options here that have a (meager) tax advantage, because the US does not consider these equivalent to anything on the US side; thus any fiscal advantage derived here is rendered moot (and often leads to a net cost) once US taxes are considered. And we cannot take advantage of any type of retirement savings plans on the US side either (IRA, Keogh) as our earned income is foreign.

Which means we can’t prepare for our retirement years (state run pensions being notably insufficient!). Forecast this 10 or 20 years out, you've got a huge population that may well end up in their "golden years" unable to take care of themselves and a burden to their countries of residence.

And let's not forget that since 2007, US citizens abroad who have passive income in the US are taxed at a higher marginal rate (that includes their supposedly excluded foreign earned income) than US residents. This is undemocratic, particularly as we do not use any state provided services.

5. On the personal front, couples cannot run their lives normally. To avoid complex issues regarding taxation, FBAR and Fatca, couples keep all their assets separate. This causes interpersonal tensions as well as hampers sound family financial planning and management.

6. US nationals are prevented from being active players and positive US representatives in their country of residence. Indeed, why would any of us volunteer to hold board positions in any type of organization if, in doing so, we would be forced to include the organization's bank accounts in our Fatca or Fbar forms? And what local organization, that otherwise has nothing to do with the IRS or the US, would want that?

7. There is a pervasive and increasingly palpable ambiance that suggests we are all guilty, and the burden of advance proof that we are not is increasingly hard to bear. Whatever happened to "no taxation without representation" and "all equal under the law"? None of this applies now. Going after multimillionaire tax evaders, I’m all for it. But the US and the IRS are treating anyone with any ties abroad as such. The chap in Brazil’s letter on this website is a poignant example of what many face, and it’s heartbreaking.

8. Americans abroad used to be powerful emissaries for the US, who were respected, appreciated and able to carry US values proudly. We are now pariahs others (individuals and institutions) look on at best warily, whom are best not dealt with because it leaves the door open to complications, costs and intrusion. And we are pariahs also for our own government and institutions, being treated differently by our own banking institutions, looked on as guilty right off the bat by our government, tax authority and often by US residents for whom expatriation is akin to an act of treason.

All of this - and more! - is terribly sad. It is not the sign of a strong country, but the behavior of a weak one. It has direct effects on the US economy, foreign policy, overseas representation, credibility, image and respect worldwide.
Country of Residence France
Voting State New York

Posted on 05/09/2012 in Tax Story from Abroad | Permalink

American housewife in Germany

I only recently learned of my requirement to file an FBAR--I've lived abroad ever since I graduated from college and been a stay-at-home mom for the past 8 years. I haven't filed a US tax return since then, though I filed faithfully while I still worked. According to my understanding, which is admittedly still a little shaky, if I were to come forward and file FBARs on my husband's account, for which I have a debit card and internet access, we could potentially face enormous fines for non-filing, especially since a few years ago we briefly had a huge balance because we sold our house and bought our new one. While we're comfortable, we definitely aren't rich and this could possibly force us to sell our home and uproot our family. I just don't see how this is in proportion to the "crime" of not knowing I had to file that I have access to my non-US husband's checking account. None of the money in the account was even earned by me, I just use it to buy groceries and clothes for the kids, etc. He has now removed me from the account, which leaves me and my small children in a vulnerable position without immediate access to money if anything should ever happen to him, or if our marriage should ever fall apart.
I'm completely furious about the whole thing and though I am and always have been a convinced Democrat, this single issue could turn me into a swing voter. That is, if either party cares enough to put it in their platform and do something about it.
Country of Residence Germany
Voting State Ohio

Posted on 05/09/2012 in Tax Story from Abroad | Permalink

05/08/2012

Couldn't sleep for weeks

I found out about and filed the FBAR forms. All of my taxable income had already been declared in my tax returns, I just never knew about the FBAR. Neither did my IRS licensed tax preparer. I also read about the "amnesty" as well, which would allow me to file the FBAR for only 25% of my assets. Wonderful. This is insane. No taxes due, no undeclared income, and I am at risk to lose my home and my life savings?
Country of Residence Japan
Voting State California

Posted on 05/08/2012 in Tax Story from Abroad | Permalink

A Sickening Tax Policy

Last year my husband and I learned about the demand that we file US taxes and report our accounts that we have in Canada, our country of residence for decades. It was an immense upheaval in our lives since I was trying to retire, I was 72 years old and the year before had again been operated for cancer. The results of the surgery and radiation caused complications which are serious and can be life-threatening - lymphedema and frequent cellulitis attacks. Getting a lot of rest and keeping stress at a minimum are crucial. After reading in the media the awful demands and threats posed in regard to the US tax and FBAR filing my stress level went way up with the result that the frequency of attacks increased. I felt so upset and sad that this was happening at my old age. We so carefully had saved a little money to make retirement somewhat easier. We now had to spend lots of time working on reporting and going to a tax accountant (a US taxes specialist), time I had looked forward to spending with my children and grandchildren in a relaxed manner so I could get healthier. Instead I kept on getting sicker. What also was so upsetting is the fact that we had to spend so much money on paying the accountant.

We have lived carefully and paid our taxes as we are supposed to in Canada. I have children and grandchildren in the United States and have always felt very much at home when visiting and presumed that one of these days I again would live in the US. It seems so sad that people in our age group with a comfortable income are being punished for being US citizens when super-wealthy Americans resident both in the US and abroad are getting away with hardly paying taxes. For this reporting I would think that the system would be well enough thought out that Americans who live in countries as Canada where the taxes are high and are in a middle income bracket would be spared from having to report in such a complicated manner. On top of that, it seems that each year new forms are thought up which make life even more complicated. I would think that the US government is capable of being fair to its citizens. I know of no other country that inflicts these draconian tax-reporting measures on their citizens who live abroad.
Country of Residence Canada
Voting State Connecticut

 

Funny posts on forum about FBAR (US expats in Japan)

http://forum.gaijinpot.com/forum/working-in-japan/banking-finance/95089-filing-us-back-taxes-and-should-i-file-a-fbar

Canadian Americans affected by FBARs

http://forums.serbinski.com/viewtopic.php?p=30878&sid=1c049380e54e43eccfde16839ebc8f8d

CdnAmerican Joined: 30 Aug 2011 Posts: 142	Posted: Thu May 02, 2013 6:06 pm    Post subject: Hi millerh - sorry to hear about your mess. I'm not an expert but can share my experience .. I had to backfile a number of forms over the span of 6 years back in 2011. I did it all on my own because I was too cheap to hire an accountant. It was a real mess, but as the process went through everything worked out in the end with $0 penalty (despite having, on paper, what could have been a $70K penalty). I guess I would think that a common sense approach would be the way to go. Also do note the IRS' stremalined backfiling approach. I don't know if that would apply to you, but the consensus I've gained from this board is - Backfiling often takes a very long time, with lots of mistakes by taxpayers and the IRS, but common sense generally prevails - Accountants can and do make mistakes - Some will use scare tactics to try to comple you to spend huge amounts on professional fees - That said, a professional will tpyically do a, well, professional job - it just may cost a lot. That's not really advice, but just my experience and impression. Good luck & sorry you are going through this .. _________________ Not a professional opinion.
Back to top
millerh Joined: 02 May 2013 Posts: 5	Posted: Fri May 03, 2013 4:37 am    Post subject: One would think that common sense should apply, but a couple of things: 1. We're not resident in Canada anymore and haven't been since late 2009, so no streamlined ovdi for us 2. Been to the Isaac Brock Society's website many times over for resources and there's lots of people in this situation My overall feelings on this matter: It's not going change anytime soon whether or not there's management change at the top at the IRS or the Treasury. The IRS is run by professional thieves. Many cross-border "professionals" will having you believing that they knew this stuff was coming all along and they're "experts". No, the reality is they didn't know this stuff either and they make it up as they go too, only they get paid for their mistakes at our expense.