# Super stressed parents- fbar / foreign income delinquentcy



## itsallgood23 (Apr 6, 2016)

So glad i found this forum. Hopefully i can get some useful advice from here as all the advice i have been getting from accountants and lawyers has just confused me even more. 

Situation
= parents got green card in mid 90s
= citizenship in mid 2000s
= india is permanent resident although they visits US often to visit me and my siblings
= mom has never worked - been homemaker all her life
= dad works in india; never earned any income in the US
= they have savings in bank accounts and brokerage accounts in india
= theyve never filed taxes or fbars EVER are 100% compliant with taxes in india
= they learnt about FBAR and foreign income taxation recently along with the potential penalties and our freaking out to the point that i am very concerned about their health
= they were so freaked out that they engaged a tax guy in the US that came recommended who advised them of the streamlined procedures and proceeded to file 6 years of FBARS earlier this year
= i did some research and i think tax accountant is wrong about my mom's eligibility
= dad is eligible for foreign since he has not been in the US for more than 35 days for 2 out 3 prior years and he genuinely didnt know he had to file 
= mom in my mind is NOT eligible for foreign as she doesn't qualify for residency test and is NOT eligible for DOMESTIC as she has NEVER filed a return in the us

Questions:
1) am i right that my mom is NOT eligible for domestic streamlined since she has not filed a return before in the US? [she has sufficient passive income that would have required her to file in the US]
2) if yes, what should we do about my mom now that we already have FBARS filed for her and she isn't eligible for any of the streamlined? 
2a) should we file 2015 before oct 15 and wait till next year when she will be eligible for foreign streamlined [she has not visited US in 2016]? if so, does she become eligible on jan 1, 2017? also what are the risks from a fees and penalties perspective?
2b) should we file 2015 and last three years of tax returns along with a letter explaining her situation? this would not be under any kind of plan or program but my mom proactively making an effort to become compliant. not sure if three years of returns would suffice or if she would need to file more. what are the risks/penalties under this sceanrio?
2c? any other options?
3) for my dad we have been advised to file under the foreign along with 2013, 14, 15 returns after the 15th. thoughts?

i would really appreciate any help i can get. these tax laws can get quite onerous and its hard to get good advice. my parents are just like many of the innocent people out there who need some help to become compliant whithout having their life savings taken from them. thanks.


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## Bevdeforges (Nov 16, 2007)

Why is your mother not eligible for the foreign streamlined process? I would think the best option would be simply for her and your father to file jointly under the foreign streamlined option. https://www.irs.gov/individuals/int...-taxpayers-residing-outside-the-united-states

Frankly, even if your mother was in the US for more than the "allotted" time, just file the back returns on a joint basis and see what (if anything) the IRS says. Chances are, they'll process them, and as long as your parents don't owe all that much in back tax, that will be the end of it.
Cheers,
Bev


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## itsallgood23 (Apr 6, 2016)

Bevdeforges said:


> Why is your mother not eligible for the foreign streamlined process? I would think the best option would be simply for her and your father to file jointly under the foreign streamlined option.
> 
> Frankly, even if your mother was in the US for more than the "allotted" time, just file the back returns on a joint basis and see what (if anything) the IRS says. Chances are, they'll process them, and as long as your parents don't owe all that much in back tax, that will be the end of it.
> Cheers,
> Bev


Thanks, Bev. My mother is not applicable for foreign because in the past four years 2012, 2013, 2014 and 2015 she has spent more than 35 days in the US for each of those years. 

i looked at the domestic procedure eligibility and it states that you need to have filed in the US previously in order to be eligible which she hasn't done. 

unfortunately the tax amounts are meaningful - greater than $100k - for both combined since they had meaningful capital gains that are not taxable in India.


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## Nononymous (Jul 12, 2011)

What happens if they just do nothing, and continue on with their lives, business as usual? Not much, I'd be willing to wager.


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## itsallgood23 (Apr 6, 2016)

thanks. thats what i had advised them... however, they wanted to be in compliance as soon as they heard. so unfortunately they did proceed and now their tax advisor went ahead and filed the FBARs. i think my dad's situation is straightforward (relatively) through the foreign streamlined process ... my mom's situation is what i confused about in terms of what is the cleanest path forward with the least potential financial and other risks.


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