# Roth excess contributions/foreign inheritance



## jenplus4fr (Jun 5, 2016)

I hope you can help. I have two questions:

1) In 1999 I opened up a Roth IRA account. We moved overseas shortly thereafter. In 2008-10, I made additional contributions to this account. I just discovered this year that because we use the foreign earned income exclusion, I was not eligible to contribute anything during these years. I am trying to figure out if it's necessary to correct this after all these years, and if so, how? The instructions on the form 5329 are very confusing.

2) My French husband received an inheritance over the 100k threshold. Since we file jointly, I am now discovering that I need to file Forms 3529, and possibly 8621. Anything else? And now the online tax software that I was hoping to use will not support these forms. Any ideas?

Thanks for your help!


----------



## Bevdeforges (Nov 16, 2007)

I'm going to move this query over to the Expat Tax section, as there are people over there who have more experience with the US forms, and this doesn't really involve French taxes. Hope we can find an answer for you there.
Cheers,
Bev


----------



## jenplus4fr (Jun 5, 2016)

Thank you. I hadn't noticed that there was a specific tax forum... ;-p


----------



## Bevdeforges (Nov 16, 2007)

Did a little checking around and I think the form you want is 3520 for reporting "Gifts from a Foreign Person." (Most likely a typo.) 

Honestly, since your "mistake" won't make any difference in the taxes owed, you may just want to let sleeping dogs lie. The IRS doesn't really have time or people to pursue errors like this where the potential recovery is $0 anyhow. 

And you may want to rethink the idea of filing jointly unless your French husband actually has a filing obligation of his own for some reason (like US citizenship). There are some minor inconveniences to filing "married, filing separately" but it does eliminate much of the hassle when unusual items like this come up for the NRA partner.
Cheers,
Bev


----------



## jenplus4fr (Jun 5, 2016)

Bevdeforges said:


> Did a little checking around and I think the form you want is 3520 for reporting "Gifts from a Foreign Person." (Most likely a typo.)
> 
> Honestly, since your "mistake" won't make any difference in the taxes owed, you may just want to let sleeping dogs lie. The IRS doesn't really have time or people to pursue errors like this where the potential recovery is $0 anyhow.
> 
> ...


This issue is actually not a mistake, either, as it happened in 2017, but in discovering this form and the stiff penalties involved in not reporting it, I was wondering if there were others that I was unaware of.
We've been filing jointly as the standard deduction was then large enough to offset any US investment income in my name. I have wondered, though, if it were still worth it.
Thanks for checking...Any idea on my first question/headache? ;-p


----------



## Bevdeforges (Nov 16, 2007)

Honestly, I'd do the same thing with the Roth IRA, too. The US-France tax treaty includes IRAs (which, as I understand, includes the Roth IRAs) as US government pensions, which are only taxable by the US anyhow, even if the Roth IRAs don't draw any tax on withdrawal. 

Net-net, it's extremely rare for someone to draw a penalty for failure to file a form if there isn't a hefty tax bill connected to the failure to file that form. The statute of limitations runs for 4 years on all income declared. Admittedly, if you fail to declare the income, there is no statute of limitations, but it sounds like you declared all the income involved and net-net the tax bills won't change for the years where the "mistake" was made.
Cheers,
Bev


----------



## jenplus4fr (Jun 5, 2016)

No, I suppose not, although when I start taking the distributions, I will admittedly have higher amounts of tax-free income than I would had I not made the mistake years ago! Since I'm also under 59.5, I'd also have the 10% early withdrawal penalty if I try to fix this. I'm tempted to let sleeping dogs lie, and claim a faulty memory...


----------

