# Just got letter from my european bank after 6 years,they mention FACTA in it ?



## diana888 (Mar 31, 2016)

Hi All !

Something unbelievable happened to me today!

We live in USA.

In 2010 (!) I have opened bank account in my country of origin (Europe) while I was on vacation, and the only reason to open it was to be able to use their bank debit card and not carry large amount of cash.

After one month we went to same local bank to close account but they said their computer is down and to come tomorrow.

We were not able to come tomorrow and then next they we left the country.
I called bank one week later, from USA, and ask them what to do with my bank account, balance was only about 10 $, they said once balance goes under 0 (because of monthly fees) account will be automatically blocked/closed.

Now after 6 years we received email from same bank stating that because of FACTA we have to report to them our SS number, US tax ID, etc ... because bank has agreement with US FACTA and they have to figure out if we live in US and pay our taxes in US .

We have 3 months to provide them all that paperwork IN PERSON (means we have to leave US and go to Europe just for that!) or they will contact their local tax authority . Then mentioned intergovernmental agreement also in that letter.

I cant believe this.

First I'm going to find out soon what happened with my account.
If its closed or still somehow active.

But the biggest problem is this - during all this years I never reported this account to IRS thinking I don't have it! (Even if balance is negative or 0)

Also when I opened it I didn't know I have to disclose it somewhere in US. 
Account supposed to be open only 1 month and only used for minor transactions (while on vacation).

If that account was never closed what should I do? 

Will they somehow report it to US and we can have problems? 
Is that what they are trying to do? 
Even if balance of account was below zero all this years?

If account was closed indeed on 2010 do they still need all my info from US?


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## BBCWatcher (Dec 28, 2012)

Relax. Let's take these things in order:

1. If the balance was US$10 or less, and this was/is the only non-U.S. financial account you have held/hold, then you did not and do not meet the filing threshold for FinCEN Form 114 or for IRS Form 8938. You had/have no filing obligation. You need a total of at least US$10,000 at any point in time in non-U.S. accounts to have any financial account reporting obligation with either of those forms.

2. If you did not receive at least $1 of interest income then you had no reportable income to worry about.

3. On IRS Form 1040 Schedule B you might have answered the question about a foreign account incorrectly, but that's OK. That error was non-willful and can be safely ignored.

4. In my view you should mail the bank a W-9 (or whatever paper form they seek -- if they haven't provided one, use a W-9), and tell them once again, in writing, to close the account. But beyond that you're done. There's no need for you to appear in person, and the bank can (and will) report the account to their tax authorities anyway -- you wouldn't change that even with an in person appearance. But so what? It wasn't a reportable account, and you had no reportable income from the account, per the assumptions above. When the U.S. Treasury eventually hears about it they'll also ignore it.

In short, don't worry about it.


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## diana888 (Mar 31, 2016)

Thank you for your response!

Actually I have to correct my self, account was open in 2009 not in 2010.

To make things worse I just realized there was sum of 8.000 or 10.000 $ that was deposited by my father one week after account was open. It was gift from him. We spent around 6000 $ during our vacation and rest was returned to my father. I see that could be problem too. 
But it was in 2009,we cant remember all details, I doubt even bank has record of that.


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## BBCWatcher (Dec 28, 2012)

diana888 said:


> To make things worse I just realized there was sum of 8.000 or 10.000 $ that was deposited by my father one week after account was open.


OK, so let's assume that the total value of your non-U.S. accounts reached at least US$10,000 in 2009, only in 2009, and never reached that threshold after 2009.

In that case, the U.S. Treasury Department has until June 30, 2016, to levy a penalty for your failure to file FinCEN Form 114 for 2009, since there is a 6 year statute of limitations. That's less than 3 months away as I write this. If you're concerned about that hypothetical exposure, no problem, file a truthful FinCEN Form 114 for 2009 now. The form even provides a space to indicate why you're filing late.

We have not heard any reports of anyone receiving a penalty notice for a late, unprompted, voluntary filing of that report.

Even a $10,000 gift, with or without some returned, has no U.S. tax consequences.


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## diana888 (Mar 31, 2016)

What about Offshore Voluntary Disclosure Program?
FinCEN Form 114 is enough?


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## BBCWatcher (Dec 28, 2012)

Unless your father and/or you are involved in some rather serious illegal activities with that money, the OVDP is not at all a good fit. That'd be 16 B-52 bombers' worth of fly swatting, as it were.

Ordinary late filing is entirely appropriate in these circumstances, in my view.


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## diana888 (Mar 31, 2016)

thank you very much for your answer!

And just for curiosity, I have been reading about Streamlined Domestic Offshore Procedure , and I don't understand why someone needs to file tax forms for last 3 years if that was all already done and nothing wrong is with that.

Lets say, in my case, I did all correct tax returns every year, and only tax return that could be wrong is from 2009 since I didn't report FinCEN Form 114 then.

So everywhere where I read about Streamlined Domestic Offshore Procedure says I need to fill out last 3 years of tax. Why?

Sorry maybe I'm stupid but would like someone to explain me that


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## BBCWatcher (Dec 28, 2012)

It's the wrong program for you, that's all. The correct program for you, as far as I can tell, is just to correct the oversight with an ordinary late filing.


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## Bevdeforges (Nov 16, 2007)

One other consideration. They obviously have your US address to have sent the request for your SSN and other information. Have they sent any sort of statement to you in all this time? If they haven't, you clearly have good reason to have believed that the account was closed out - so there is certainly no intent to evade the reporting.

Send them a W-9 form properly filled out. The W-9 is kept by the bank - it is not sent to the IRS (the IRS really doesn't WANT the form). What they will (or might) send either to the IRS or to the national bank authority would be your account information - most likely name, address, SSN and ending balance for 2015. Offer them a cover letter explaining that you did not realize the account was still open and ask them for at least a year-end statement.

Quite honestly, if the current balance in the account is "around" $10,000 in local currency, there is also the possibility that exchange rate changes would make the balance a little less or a little more, so again there is no fraudulent intent involved.

Take a look at the 2015 statements (if you ever got them) and see how much interest we're talking about here. Chances are, if the account is now over $10,000 you can just start filing the appropriate FBARs for the account for 2015 and going forward until you manage to close the account. The IRS does not have the time to track down (at most) a couple hundred bucks of interest over the last few years and if they should come back to ask where the FBARS are for prior years, you can honestly say that you did not realize the account was still in existence. (I'm willing to bet they'll just file your 2015 FBAR away and you'll never hear anything about it again.)
Cheers,
Bev


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