# Foreign Pension and FBAR and Tax Return Ammendment



## BJ100

Hi all, 

I'm a US citizen and recently learned that I should have been reporting my South African company pension as a foreign trust for FBAR. When I filed my 2012 FBAR, I interpreted "Foreign Trust" to mean a trust created for me and in my control, so didn't even think about my company pension plan as falling into this category! It's not like, I had access to the funds or the funds were in my control.

Further, I assumed that foreign pension would need to be reported on the 1040 once I'd taken out a distribution (which I didn't do in 2012). It appears I was also wrong on that score! My employer contributed on my behalf and the balance of the pension plan was under $6000 in 2012! 

Three related questions for you:
1) I've seen some comments about "streamlined reporting" with suggestions from some that some errors with FBAR/Income Tax filing may not be a huge deal. I'd very much appreciate your advice on how to address these issues for 2012 FBAR and 2012 1040. As you may be able to tell, I'm a novice at US expat tax filing and still understanding the basics of what happens with pension plans. Or should I hire a tax accountant/tax lawyer? Which would be awful as I, like the majority of expat Americans, have income that is less than the foreign income threshold. 

2) In 2013 I resigned from my company and cashed out my pension plan. I'm using Turbo Tax Premier for tax filing and I don't think it's asking the right questions about Foreign Pension fund holdings for 2013 so I'm a little skeptical of its output. I'd be grateful for any suggestions on pitfalls to look out for and how to go about making sure the pension distribution is handled correctly in 2013 FBAR and 2013 1040. 

3) I'm becoming more and more appalled/mystified as I read additional information about IRS treatment of pension plans. I only have the account balance for the pension plan as of 30 days before my resignation. What other details would you suggest I request from my former company in order to have all the supporting documents to do this right?

Thank you so much, I appreciate your help! I usually think I'm a reasonably intelligent person but trying to file expat US taxes for the last two tax seasons has left me feeling dumber and dumber! IRS guidelines are so opaque!


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## Bevdeforges

Pension plans are a really tricky issue for us expats - and there are times I think even the IRS isn't sure what they want and need reported.

Can't tell from what you've posted precisely what sort of pension plan you have, but to the extent that you don't have a defined "balance" in your name and don't find out how much the cash-out value is until 30 days before your retirement, it may not be reportable at all.

Check out the publications available on the IRS website. This is a pretty good listing of all the possibilities: Retirement Plan Forms and Publications
but for the time being, concentrate on the list of publications and skip the 4 digit publications (these are mostly for businesses offering retirement plans to their employees). Pubs 575 and 939 should be helpful.

Not all retirement plans are "trusts" and thus not all plans have to be reported. Obviously, you should see if you can consider your plan to be one of those types of plans - if only because you have had no ongoing information regarding gains, losses and balances over time. There is lots in tax law (heck, in all US law) that is subject to interpretation.
Cheers,
Bev


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## FFMralph

I agree with Bev "Pension plans are a really tricky issue for us expats".
I am not reporting my PPs on FBAR because I cannot determine the type. Typicall European Job related pensions just don't fit in any IRS description. The companies will not fall under FACTA reporting requirements because they are not considered a financial Institution. Just Report the earnings when you start withdrawing and claim the FTC to reduce US tax obligations.


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## BJ100

Bevdeforges said:


> Pension plans are a really tricky issue for us expats - and there are times I think even the IRS isn't sure what they want and need reported.
> 
> Can't tell from what you've posted precisely what sort of pension plan you have, but to the extent that you don't have a defined "balance" in your name and don't find out how much the cash-out value is until 30 days before your retirement, it may not be reportable at all.
> 
> Check out the publications available on the IRS website. This is a pretty good listing of all the possibilities: Retirement Plan Forms and Publications
> but for the time being, concentrate on the list of publications and skip the 4 digit publications (these are mostly for businesses offering retirement plans to their employees). Pubs 575 and 939 should be helpful.
> 
> Not all retirement plans are "trusts" and thus not all plans have to be reported. Obviously, you should see if you can consider your plan to be one of those types of plans - if only because you have had no ongoing information regarding gains, losses and balances over time. There is lots in tax law (heck, in all US law) that is subject to interpretation.
> Cheers,
> Bev


Thanks a lot Bev! I've done enough research to know that I'm not eligible for SA/US Tax Treaty :sad: and will review Pubs 575 and 939 over the w/e. I should clarify that I'm not a retiree but had an option to cash out of the pension plan on resigning, which I did. I will add notes on what I ultimately did and how I handled this in Turbo Tax in case someone else may find this helpful in the future.


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## BJ100

FFMralph said:


> I agree with Bev "Pension plans are a really tricky issue for us expats".
> I am not reporting my PPs on FBAR because I cannot determine the type. Typicall European Job related pensions just don't fit in any IRS description. The companies will not fall under FACTA reporting requirements because they are not considered a financial Institution. Just Report the earnings when you start withdrawing and claim the FTC to reduce US tax obligations.


@FFMralph - Thank you That's really helpful advice and I will do as you suggested! It's what I thought I'd have to do but was thrown for a loop when I started reading about what constitutes a foreign trust.


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