# Fbar for employer accounts



## Cdnexpat4 (May 23, 2020)

Hi, I am a US citizen in Canada potentially looking at stepping up my career into management.

I am worried about the viability however due to fbar requirements. Specifically, having to file an fbar for accounts I may have signing authority over but no financial interest in, specifically employer bank accounts.

Personally, if i owned a Canadian business and i was Canadian only, i wouldn't want an American to be a manager in my business as i wouldn't want my bank and money business being reported to the US government. I'm sure many Canadian businesses would feel this way.

As I'm looking for work now, obviously if i was a manager with signing authority I'd have to report my employer's accounts, and many employers would not want me to do that. But I'd have to be honest and explain I'd be obligated to do that. 

And I'm quite sure I wouldn't get hired. Filing fears is a material requirement I'd have to be honest about during the hiring process. 

I'm looking at some specifically Canadian businesses I'd like to work for with no US interests so they wouldn't already be filing fbar reports of their own.

Am I shooting myself in the foot and disqualifying my career with many employers? I feel like I will never be able to move ahead in life or do what I want for a living with the companies I'm interested in because of the jail sentence that is the fbar and being a US citizen expat.

Thanks for your input!


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## Bevdeforges (Nov 16, 2007)

You're far from the first to have noticed this. Over here in Europe, there are companies that shy away from hiring American citizens into positions where they would have signing authority over company accounts. OTOH, if you do have to report company accounts in that "signing authority but no financial interest" category, you CAN just fill in the name and address of your company/employer and that's it. Read through the FBAR instructions carefully and they tell you to do that - (Instructions for Part IV):


> . In addition, United States person who (1) resides
> outside of the United States, (2) is an officer or employee of an employer who is physically
> located outside of the United States, and (3) has signature authority over a foreign financial
> account that is owned or maintained by the individual's employer should only complete Part I
> and Items 34-43 of Part IV.


No balance information and only identifying info on your employer, not anything on the specific accounts themselves.


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## Cdnexpat4 (May 23, 2020)

Bevdeforges said:


> You're far from the first to have noticed this. Over here in Europe, there are companies that shy away from hiring American citizens into positions where they would have signing authority over company accounts. OTOH, if you do have to report company accounts in that "signing authority but no financial interest" category, you CAN just fill in the name and address of your company/employer and that's it. Read through the FBAR instructions carefully and they tell you to do that - (Instructions for Part IV):
> 
> 
> > . In addition, United States person who (1) resides
> ...


I didnt realize that, thanks for the clarification. That's not as bad as I thought.

However I'm not sure how I'd make explaining that palatable to a potential employer.

"I'm American and although I don't have to give account specifics, I still have to advise the IRS I have signing authority over company accounts due to my position."?

As an employer, I think that would still turn me off hiring an American as a manager.
Any thoughts?

Thanks again, I really appreciate it!


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## Bevdeforges (Nov 16, 2007)

It can depend on the employer, but mostly it seems to be smaller employers who might have a problem with the idea. Larger companies have probably encountered the situation before and realize what the situation is.

Now, if you get into the position where you are a company director or holder of 10% or more of the stock of the company, that does bring with it some pretty heavy reporting obligations for your employer.


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## Jca1 (Aug 7, 2019)

Cdnexpat4 said:


> I didnt realize that, thanks for the clarification. That's not as bad as I thought.
> 
> However I'm not sure how I'd make explaining that palatable to a potential employer.
> 
> ...


Personally I don't think I'd tell the employer as no company information other than that you work there in management is being disclosed.


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## Nononymous (Jul 12, 2011)

If you are serious about staying in Canada, get Canadian citizenship as soon as you can, then if it's possible for you, cease all US tax compliance, including FBAR reporting of employer's accounts. Ultimately you may need to either renounce, lie to employers, or avoid any opportunities that require signing authority.


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## Nononymous (Jul 12, 2011)

delete - missed earlier comment


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## Cdnexpat4 (May 23, 2020)

Nononymous said:


> If you are serious about staying in Canada, get Canadian citizenship as soon as you can, then if it's possible for you, cease all US tax compliance, including FBAR reporting of employer's accounts. Ultimately you may need to either renounce, lie to employers, or avoid any opportunities that require signing authority.


Do you think all of that would be necessary? Jca1 indicated I'd really only be disclosing my employer and the fact that's I'm in management, thus no confidential employer info and thus not necessary to say anything to employer.

Bevdeforges also kindly pointed out only reporting the employer name and address is actually required and not actual account info, and that the real reporting obligations kick in at director or 10% of stock holding only.

So I'm just curious why you feel such drastic action would be more advisable.

Thanks everyone for your opinions, t appreciate them and the variety is food for thought.


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## Nononymous (Jul 12, 2011)

Apologies, I've conflated the personal and the professional issues.

On the professional front, I really don't know if the quite limited FBAR requirement for signing authority would be a problem for a Canadian employer. Cross that bridge when you come to it, I guess. Possibly it's a non-issue, but we've heard reports from people in Europe who feel that their career prospects are damaged because of US citizenship. Certainly partnerships and things like that are much trickier once there are US filing requirements involved; not surprisingly, people outside the US tend not to want to go into business with Americans.

On the personal front, if you are planning to spend the rest of your life in Canada, then it makes sense to not be filing US tax returns unless you have some significant financial interests in the US. In addition to the hassle and cost if you pay someone to do your returns, US tax compliance means you will miss out on savings opportunities available to Canadians, such as TFSA accounts and no capital gains tax on the sale of a primary residence, among others. You don't necessarily need to renounce US citizenship; once you have Canadian citizenship you are protected from any attempt at collection by the IRS, so you can simply cease filing and ignore the US government. This again assumes no US financial ties or expected inheritance of property etc.


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## Cdnexpat4 (May 23, 2020)

Nononymous said:


> Apologies, I've conflated the personal and the professional issues.
> 
> On the professional front, I really don't know if the quite limited FBAR requirement for signing authority would be a problem for a Canadian employer. Cross that bridge when you come to it, I guess. Possibly it's a non-issue, but we've heard reports from people in Europe who feel that their career prospects are damaged because of US citizenship. Certainly partnerships and things like that are much trickier once there are US filing requirements involved; not surprisingly, people outside the US tend not to want to go into business with Americans.
> 
> On the personal front, if you are planning to spend the rest of your life in Canada, then it makes sense to not be filing US tax returns unless you have some significant financial interests in the US. In addition to the hassle and cost if you pay someone to do your returns, US tax compliance means you will miss out on savings opportunities available to Canadians, such as TFSA accounts and no capital gains tax on the sale of a primary residence, among others. You don't necessarily need to renounce US citizenship; once you have Canadian citizenship you are protected from any attempt at collection by the IRS, so you can simply cease filing and ignore the US government. This again assumes no US financial ties or expected inheritance of property etc.


Thank you for the clarification, I appreciate your detailed response.

I do plan on living in Canada for good as I'm married to a Canadian, and will get my citizenship at some point. However that said I do have family in the US, so return frequently, hence why I wouldn't even be able to cease US tax compliance, as they could stopmpeople at the border should the IRS ever tie your tax compliance to your passport and border patrol sees it, wouldn't surprise me at all the way things are going, I'm sure that will be done nitwits big idea sometime soon.

Keeping my US citizenship is just less hassle for returning when I need to, and also for times such as now with covid when I wouldn't be able to return without cause passport due to border closures. Something like covid which I wouldn't have guessed a year ago, show we never know what may come up, and somewhat of a benefit of keeping a US passport as well. Crazy times.

That said, as you mentioned the US passport is also a jail sentence in other ways, fbar concerns such as my original post and tax filing costs, as well as losing out on TFSA benefits (although I do take advantage of rrsps since they are included in the tax treaty). My house although increased in value, wont hit over the 500k/2 (married) capital gain exemption any time soon (especially now with housing price drops with covid).

So I guess it's a balance of the benefits vs cost of US citizenship and practicalities of basic life as an expat. I just wish the idiocy of citizenship based taxation (instead of the proper, and fair, residency based) didn't exist, and the fbar is just the worst. 

My spouse isn't happy about reporting our personal business to the IRS either, much less the other financial caveats you mentioned. And the fact the fbar is administered by Financial Crimes Enforcement Network? What other country in the world basically suspects you're a financial criminal just by being president elsewhere? Just unreal.

But thanks again I appreciate the input. 🙂


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## Nononymous (Jul 12, 2011)

You seem to be fairly aware of the situation, and have enough family ties to the US that you can't simply walk away. 

That being said, it's advisable to obtain your Canadian citizenship as soon as possible. There's no particular reason to wait. It protects you in case something goes sideways and the IRS begins demanding lots of money.

At present there is no checking of tax status on entry to the US. (Unless of course things were so bad that one were under criminal investigation, but presumably one would know to avoid the place.) This might change in the future, but if recent events tell us anything, it's more that the US government is incapable of organizing even a modest banquet, so it won't merging databases to create a super surveillance state anytime soon.

As for your spouse, some things you can do: keep a minimal balance in a joint account for household expenses, if you feel compelled to be 100 percent honest on your FBARs, to ensure that his/her money is never reported; if children are in the picture, put any RESP in your spouse's name only; also regarding children, while you may wish to report their birth to obtain passports for travel, and tax credits for you, do instruct them that with a Canadian birthplace and citizenship, they will be able to easily ignore FATCA reporting and basically drop off the IRS radar when they turn 18 - absolutely no reason for them to be filing US tax returns themselves.


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## Cdnexpat4 (May 23, 2020)

Nononymous said:


> You seem to be fairly aware of the situation, and have enough family ties to the US that you can't simply walk away.
> 
> That being said, it's advisable to obtain your Canadian citizenship as soon as possible. There's no particular reason to wait. It protects you in case something goes sideways and the IRS begins demanding lots of money.
> 
> ...


Thanks for the tips, I really appreciate the input.

Another quick question - how does the Cdn citizenship specifically protect against FATCA and fbar enforcement? I thought Revenue Canada wouldn't enforce IRS collection on anyone legally resident in Canada, citizen or not.

Once I crossed the border in the US as well, if I wasn't tax filing and especially fbar compliant, I'd be a sitting duck for enforcement and penalties, especially if I ever decided to move back to the US in later (perhaps retirement for the weather) years... ?


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## Nononymous (Jul 12, 2011)

Under Article XVI of the US-Canada tax treaty, CRA will assist IRS with collection of taxes and penalties against US citizens who are not Canadian citizens, but not against dual citizens. (Only known recent instance of this happening was against a guy named Dewees, who really made life difficult for himself by starting to file.) Legal permanent residents are technically vulnerable to collection, but of course the IRS has very little information about them if they don't file.

FBAR fines are not collectible in Canada from anyone, regardless of citizenship. There's no protection against FATCA per se, but Canadian banks are relatively relaxed, generally only needing customer self-certification. That's a fancy way of saying it's easy to lie to them, they don't care enough to check. Note that this works fine for personal banking but I wouldn't lie about an employer's accounts.

Travel to the US should be fine in most cases. Just because a person is non-compliant doesn't mean that they're in trouble with the IRS. (Compliance rates in Canada and elsewhere are probably well under 10 percent.) The IRS won't have much information beyond possibly FATCA reports, which they are not currently using to identify or contact people without matching FBAR data, and which say nothing about income. In general the border officers have no access to tax data, but if you had managed to get into enough trouble that you had run up a debt that the IRS had tried to collect (in other words, if you had been filing and somehow the IRS determined that you owed it money - which would not be the case for simple non-compliance) then there are a variety of potential problems: loss of US passport if the debt exceeds $51k, being flagged on entry to have contact details taken for IRS follow-up, or even arrest if criminal charges had been laid. But you need to owe an awful lot of money for anything extreme to happen - it's very rare.

If you were seriously planning to move back to the US at some point then you'd behave differently. If you only need to visit then it's quite reasonable to quietly cease compliance.


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