# FBARs



## 597689

*I have been living overseas for few years. I started working early 2013 in Saudi Arabia. I have to do my 2013 return (which I am doing now and will send it in next week).

I just found out about the FBARs filing which I never heard about before. I do have a bank account with balance of more than 10K (less than 50K) in Saudi and since 5 years ago.

What is best to do for me for the FBARs? Should I just file the 6 past FBARs as I understood or use the stream line questionnaire for non-filer , non resident.

I owe no taxes by the way in 2013 due to the foreign income exclusion.
Also, my bank account never generated any income for me since they are interest free account.

Did anyone have a similar situation?*


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## BBCWatcher

There is currently no penalty for honest, unprompted late filing of FBARs. The recommendation would be to go ahead and file your late FBARs for the years when you were required to file. Use the electronic filing system (the only option now). On the form you can select the reason why you're filing late. Answer truthfully, and that's that.

The IRS's Streamlined Program is for somewhat more complex cases, not yours.


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## 597689

BBCWatcher said:


> There is currently no penalty for honest, unprompted late filing of FBARs. The recommendation would be to go ahead and file your late FBARs for the years when you were required to file. Use the electronic filing system (the only option now). On the form you can select the reason why you're filing late. Answer truthfully, and that's that.
> 
> The IRS's Streamlined Program is for somewhat more complex cases, not yours.


I heard & read all types of stories\text from internet including IRS Web about BIG penalty per account per year !!! Scary thought!!


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## Bevdeforges

They have yet to impose any of those big penalties against folks who simply have overseas bank accounts unconnected to any sort of income tax "issue". In fact, if you only have the one account overseas, I'd just file the 2013 FBAR and be done with it.

It's a simple report of your overseas accounts and as long as you've reported the interest - or have no tax liability anyhow - it's very doubtful they will do anything more than register the fact that you have filed.
Cheers,
Bev


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## BBCWatcher

mya5112 said:


> I heard & read all types of stories\text from internet including IRS Web about BIG penalty per account per year !!! Scary thought!!


Yes, penalties can be scary, which is why...you ought to file to avoid possible penalties!


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## 597689

Bevdeforges said:


> They have yet to impose any of those big penalties against folks who simply have overseas bank accounts unconnected to any sort of income tax "issue". In fact, if you only have the one account overseas, I'd just file the 2013 FBAR and be done with it.
> 
> It's a simple report of your overseas accounts and as long as you've reported the interest - or have no tax liability anyhow - it's very doubtful they will do anything more than register the fact that you have filed.
> Cheers,
> Bev


Thank you for your response. Since FATCA will be in effect, I would be concerned to file just 2013 and I have the account for 5 years. I want to be in the safe side and not lose sleep over it in the future. 

I don't know if FATCA data sharing includes account opening date!!!!


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## 597689

BBCWatcher said:


> Yes, penalties can be scary, which is why...you ought to file to avoid possible penalties!


I meant penalties for filing late only.!!! 10K per account per year. 

Not filing at all, you are right, it is a whole different issue.


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## Bevdeforges

mya5112 said:


> Thank you for your response. Since FATCA will be in effect, I would be concerned to file just 2013 and I have the account for 5 years. I want to be in the safe side and not lose sleep over it in the future.
> 
> I don't know if FATCA data sharing includes account opening date!!!!


It depends on where your accounts are located, but many of the bi-lateral agreements concerning FATCA reporting specifically exclude those accounts in existence as of 31 December 2013 or July 1st 2014 if they are under a certain amount (something like $50,000). Only new accounts opened by US persons will be reported at that point. But you need to see the agreement that applies to the country where your account(s) are located.
Cheers,
Bev


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## BBCWatcher

Also, as mentioned, there are currently no penalties for unprompted voluntary late filing of FBARs if explained on the form. I'm going to disagree with Bev here and encourage you to close out your filings by filing. You never ought to pass up a penalty free offer, in my view.


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## 597689

Bevdeforges said:


> Only new accounts opened by US persons will be reported at that point. But you need to see the agreement that applies to the country where your account(s) are located.
> Cheers,
> Bev


Actually, I read the fatca agreement with few different countries (on their web site). The reporting will be for existing customers as well as new accounts. The thing I did not understand is: will they report (the banks) balance on 12/31 or date agreement is in effect. 

It seems that the magic number of above USD 50K account is common for all countries !!!


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## BBCWatcher

How much or how little data governments exchange only has relevance if you plan to try to get away with violating the law. I was under the impression you have no such plans.


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## Bevdeforges

mya5112 said:


> Actually, I read the fatca agreement with few different countries (on their web site). The reporting will be for existing customers as well as new accounts. The thing I did not understand is: will they report (the banks) balance on 12/31 or date agreement is in effect.
> 
> It seems that the magic number of above USD 50K account is common for all countries !!!


It really depends on the country. For example, France is only reporting as of July 1, 2014. But what's actually important when it comes to FBAR is reporting the existence of the accounts. The "high balance" or year end balance or whatever else is only an indicator of the size of the account. For your reporting purposes, a good faith estimate is perfectly adequate (unless you actually do have something to hide). 

Remember, too, that the US isn't the only country that requires taxpayers to report foreign bank accounts. They are moving toward an international reporting system (with requirements somewhat less stringent than FBAR/FATCA) which may eventually replace the US requirements.
Cheers,
Bev


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## ForeignBody

The obsession people have about what, when and how much banks will report under the FATCA agreements baffles me, unless they have something to hide.

Completion of the FBAR really is simple. Just do it and get on with life.


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## Bevdeforges

ForeignBody said:


> The obsession people have about what, when and how much banks will report under the FATCA agreements baffles me, unless they have something to hide.
> 
> Completion of the FBAR really is simple. Just do it and get on with life.


Agreed - the FBAR forms have been around for ages. At least for the last 20 years or so, and I'm not sure they were that new when I first became aware of them when I first expatriated.

FATCA is a bit more worrying, because of some of the implications of reporting dead normal "investments" which may or may not be subject to reporting.
Cheers,
Bev


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## 597689

BBCWatcher said:


> How much or how little data governments exchange only has relevance if you plan to try to get away with violating the law. I was under the impression you have no such plans.


I disagree a little. Knowing details keeps you from making mistakes and not necessarily violating the law.


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## 597689

Bevdeforges said:


> But what's actually important when it comes to FBAR is reporting the existence of the accounts. The "high balance" or year end balance or whatever else is only an indicator of the size of the account. For your reporting purposes, a good faith estimate is perfectly adequate


Are you sure all what they want is a good estimate? They do not say that on their webs

I don't have records of my bank account and trying to get something like this for 5 years back from the bank is tedious.

I can check 2 years easily.


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## DavidMcKeegan

mya5112 said:


> Are you sure all what they want is a good estimate? They do not say that on their webs
> 
> I don't have records of my bank account and trying to get something like this for 5 years back from the bank is tedious.
> 
> I can check 2 years easily.


You should be fine providing just an estimate, I would even overestimate just to be safe. Since you are not taxed on FBAR's, there is no harm in over reporting.

Also, I just want to throw my two cents out there and let you know that we have caught up hundreds of people on their FBAR's and have yet to see a single penalty for those who come forward voluntarily. Without question I would back file the last six years and be done with it.

I hope this helps and good luck!


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## maz57

Bevdeforges said:


> Remember, too, that the US isn't the only country that requires taxpayers to report foreign bank accounts.


True, but the US is the only country (that I'm aware of, anyway) that requires its citizens to report their local bank accounts as "foreign" accounts even though the individual doesn't reside in the US and has an official tax home in some other country. 

Most countries tax authorities want to know about it if a taxpayer has accounts in other countries, but once that individual has officially exited the tax system of that country they no longer care.

The ONLY way to exit the US tax system is to renounce US citizenship. That is a significant difference.


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## maz57

BBCWatcher said:


> How much or how little data governments exchange only has relevance if you plan to try to get away with violating the law. I was under the impression you have no such plans.


Gosh, that sounds very much like the apologists for the NSA "if you're not doing anything wrong, what are you worried about". I don't like the idea of government (any government, not just the US government) knowing every detail of my personal life. Its none of their damn business. 

Call me old school, but I thought that all that privacy legislation actually meant something. Its not like expats are criminals on parole who are required to report regularly to their parole officers. How about some evidence of criminality before requiring all the invasive reporting? 

Having a checking account at the local bank down the street is not evidence of criminal activity.


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## DownunderInUS

maz57 said:


> Gosh, that sounds very much like the apologists for the NSA "if you're not doing anything wrong, what are you worried about". I don't like the idea of government (any government, not just the US government) knowing every detail of my personal life. Its none of their damn business.
> 
> Call me old school, but I thought that all that privacy legislation actually meant something. Its not like expats are criminals on parole who are required to report regularly to their parole officers. How about some evidence of criminality before requiring all the invasive reporting?
> 
> Having a checking account at the local bank down the street is not evidence of criminal activity.


I totally agree with maz57. In US, you don't report your 401K or IRAs every year to irs just because you have it. Now, FBAR requires knowing all your assets outside the country. It's a violation of privacy, pure and simple. 

Now we are starting to see challenges to the passing of an IGA such as those in Canada. 

It's easy to say if you got nothing to hide, it's no issue. Most people who say this are not affected.


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## BBCWatcher

maz57 said:


> I don't like the idea of government (any government, not just the US government) knowing every detail of my personal life. Its none of their damn business.


Non sequitur.

A timely filed, truthful report is always an absolute defense. Whether and how much two parties not including you exchange data has no impact on penalties or criminal sanctions _if you are filing truthful reports_.

If you want to debate the merits of whether governments ought to be exchanging data amidst your privacy concerns, that's a completely separate debate for those who, for whatever reason(s), have decided to file truthful reports. Or, said another way, I'd make your political arguments in the appropriate forums. This is a tax forum.


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