# Form 8938 US Tax advice needed



## Sunseekers (Jan 15, 2014)

Hi there,

I need advice! My husband and I moved to the US in 2014. We filed our taxes using online software, ticked the box that said yes we have foreign accounts and were given the info that we needed to file an FBAR which we did each year since then.

Imagine our surprise this week when doing taxes using different software when they told us to file form 8938. We had no idea about this form and have not filed it. I feel sick!

We are above the reportable threshold and in our various accounts have income of about $800 each year that is taxable. 

What is the best way forward? I have read conflicting information. 

I super appreciate your advice or anyone that has had a similar experience.

Thank you!


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## Bevdeforges (Nov 16, 2007)

OK - you have a couple of options.

The easiest approach is just to file the appropriate forms this time (i.e. for 2017) and going forward. An additional $800 of interest income isn't going to generate a huge tax bill (and as low as interest rates have been lately, even paying the interest on the additional tax won't generate that much income for the government). There is also the possibility/likelihood that you paid some sort of income tax on the earnings from the foreign accounts that would be creditable against your US tax obligation. 

The second approach would be to amend the returns for 2014, 2015 and 2016, declaring the additional income, adding the form 8938 for each of the three years, and paying up whatever additional tax is generated, plus the applicable interest . This is probably the "safest" approach - it will cost you a bit, but there should be no particular repercussions since you are coming forward with the information and resolving the omissions (both of paying the taxes and filing the 8938s).

https://www.irs.gov/forms-pubs/about-form-1040x for information about how to amend your returns from previous years.
Cheers,
Bev


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## Sunseekers (Jan 15, 2014)

Hi Bev, 

Thanks so much for your reply. We have pretty much decided to amend the previous returns. We are just so annoyed at our stupidity. Reading online is pretty terrifying. I have come across things about this being seen as a quiet disclosure which is frowned upon? Does this leave us open to potentially greater problems? I contacted a couple of CPAs and they are looking for 5k to file amendments, some mentioned noisy disclosure, another some program. This whole thing is so stressful.

Thanks again for your advice!


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## Bevdeforges (Nov 16, 2007)

Quiet disclosure, noisy disclosure - you made a mistake, and by filing amendments now that you realize your mistake you are owning up and resolving the issue. There is a reason that they have that 1040X form in the first place.

The main thing is that you come forward, say "oops" and make your amends. (Oh, and pay the back taxes plus the interest charges.)
Cheers,
Bev


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## Sunseekers (Jan 15, 2014)

Ok, thank you, we most certainly will do that. Is it advisable to put a letter in stating why we didn't file it previously? 

One other question, to make sure that I don't screw up the amendment. I have a UK teacher pension that hasn't been touched in 5 years. I don't have access to it until I reach retirement age . Does this go on the 8938 and I state that amount that's held in it now and put the income as 0? 

This is a defined benefits final salary scheme which doesn't go on fbar?

I can't thank you enough for your responses!


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## Bevdeforges (Nov 16, 2007)

I think there is a space on the 1040X form that asks why you're amending your returns. That's the proper place for an explanation - just keep it simple and direct. (Something like "I only learned recently that this form was required.")

If your teacher pension is something you can't touch until retirement and it doesn't go on the fbar, then you don't need to report it on the 8938 nor on your returns. 
Cheers,
Bev


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## Sunseekers (Jan 15, 2014)

Thanks Bev, 

We filled out the amendments, looks like we owe about $100 per year. We have included payments for these amounts. I had been hoping there was a way to pay the interest etc and sent that off too but everything I've read says the IRS sends you a bill after. Is this correct info? 

I of course was hoping I could include it and keep everything crossed and never hear again. Wishful thinking...


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## Bevdeforges (Nov 16, 2007)

I think it's probably correct about having to wait for the IRS to send you a "bill" for the interest. But, interest rates have been pretty minimal these last few years so it shouldn't be too much of a burden. (And, the IRS may be overburdened enough at the moment that they just kind of let it all slide. Well, you can always hope.)
Cheers,
Bev


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